How Banks Pass On RBA Rate Cuts (And Why the Timing Varies)
When the Reserve Bank of Australia (RBA) cuts the official cash rate, it doesn’t mean your mortgage repayment drops the next day. Here’s what actually happens.
Why banks don’t all move at the same time
Each lender independently decides whether – and when – to pass on a cash rate change to their variable home loan customers. In practice, most major banks do pass on cuts in full, but the effective date typically lands anywhere from a few days to two weeks after the RBA’s announcement. Smaller lenders and non-banks sometimes move faster (to attract customers) or slower (due to funding cost differences), and occasionally a lender passes on only part of a cut.
What “effective date” actually means for you
The effective date is when your loan starts being calculated at the new rate – it’s not necessarily when your minimum repayment amount visibly drops. Many lenders keep your repayment at the same dollar figure unless you request a change, meaning the extra you’re paying goes straight toward the principal instead. This is worth checking with your specific lender, since it affects whether a rate cut speeds up paying off your loan or simply lowers your monthly outgoings.
How to find your bank’s current effective date
Because this changes with every RBA decision, the most reliable way to check your specific lender’s timing is:
- Your lender’s official rate-change announcement (usually on their news/rates page)
- Your loan account notifications (most banks email or notify in-app)
- Asking us directly – we track these across the lenders we work with
Want to know exactly what a rate change means for your loan?
Message us and we’ll check your specific lender’s current position and what any recent RBA move means for your repayments.