Home loan rates shifted sharply this week, according to Canstar, as lenders moved in response to the Reserve Bank’s third cash rate cut of 2025.
The central bank lowered the cash rate by 25 basis points to 3.6%, citing moderating inflation pressures and a still-tight labour market, while noting global uncertainty remains elevated.
Community First Bank lifted one owner-occupier variable rate by 0.2%, while 10 lenders cut 69 variable rates by an average of 0.29%.
Two lenders also trimmed 13 fixed rates, averaging a 0.11% reduction. The average owner-occupier variable rate now sits at 6.17%, while the lowest variable rate in the market remains 4.99% from Police Credit Union.
According to Canstar, there are now 943 home loan rates below 5.50%, up from 910 the previous week.
“It was a big week in the world of personal finance with the RBA cutting the cash rate for the third time this year,” said Sally Tindall (pictured), Canstar insights director.
“The central bank also left the door open for the possibility of at least one further cut to come and with three meetings left in 2025, many economists have their sights set on November.”
Canstar’s tracker shows almost 80 lenders have now announced post-RBA rate changes, although some were quicker to act than others.
“Athena and Unloan were straight out of the gates again this time around, passing the cut on in full on the Tuesday, while Macquarie moved on Friday,” Tindall said.
At present, the lowest variable rate in the market sits at 4.99%, although Tindall noted this could change if Police Credit Union adjusts its pricing.
ABS lending indicators show RBA’s rate cutting cycle is adding fuel to the property market.
The average new loan size hit a record $678,000 in Q2 2025, rising by around $198 a day during the quarter.
Refinancing activity also surged, with an average of 1,084 loans refinanced per day in the June quarter as borrowers sought sharper deals.
Tindall said the refinancing wave was also reflected in RBA’s variable rate data.
“There’s now the smallest of gaps between the average owner-occupier variable rate and a new customer owner-occupier variable rate,” she said. “Are new customer variable rates becoming less competitive? Absolutely not. It’s that the average existing customer is becoming increasingly savvy with their mortgage rate, which is fantastic to see.”
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