Get App
Fixed rates sink to 4.89% as RBA cut edges closer
08 Aug 2025
Bank of Queensland has today slashed its lowest fixed rate to 4.89% for 2-years – the new lowest standard home loan rate in the market.
This rate cut, which is for owner-occupiers with a 20 per cent deposit, is additional confirmation lenders are pricing in further RBA cash rate cuts as they compete for new business with headline grabbing rates.
← Mobile/tablet users, scroll sideways to view full table →
| Lowest fixed rates on Canstar | ||
|---|---|---|
| Term | Lender | Lowest rate from |
| 1-year | Pacific Mortgage Group, Bank of China | 4.99% |
| 2-year | BOQ | 4.89% – lowest in market |
| 3-year | Greater Bank, The Mutual | 4.94% |
| 4-year | Macquarie, People’s Choice, BOQ | 5.29% |
| 5-year | Macquarie, People’s Choice, BOQ, Heritage Bank | 5.29% |
| Variable | Police Credit Union | 4.99% |
Source: Canstar.com.au. Excludes eco loans. Rates are for owner-occupiers paying principal and interest. LVR and other requirements apply.
This excludes green loans, however, with Bank Australia offering a lowest fixed rate of 4.59% for 3 years for new builds with a NatHERS 7.5 star rating or higher, all electric and rooftop solar. Additionally, the home must have been built within the last 18 months.
Fixed rates under 5% now a firm fixture in mortgage market
While there is just 0.10 percentage points between the lowest fixed and variable rates, Canstar data shows there are 18 lenders offering at least one fixed rate under 5%, but just one lender – Police Credit Union – offering a variable rate under this mark.
However, if the RBA cuts the cash rate on Tuesday, more lenders could drop variable rates under this mark.
What will a good variable rate look like after the next cash rate cut?
If the RBA fires off the third cash rate cut for the year at the end of its meeting on Tuesday, Canstar estimates:
- More than 30 lenders will offer at least one variable rate under 5.25%.
- More than 70 lenders will offer at least one variable rate under 5.50%.
- 5.54% will be the new estimated average variable owner-occupier rate for existing borrowers.
How much would another cash rate cut impact variable borrowers?
If the RBA cuts the cash rate to 3.60% on Tuesday, an owner-occupier with a $600,000 debt today, and 25 years remaining on their loan, could see their monthly repayments drop by $90, assuming the banks pass it on in full to existing variable rate borrowers.
← Mobile/tablet users, scroll sideways to view full table →
| Potential impact of an August RBA cash rate cut | ||
|---|---|---|
| New minimum monthly repayments | Difference | |
| $500,000 | $3,083 | -$75 |
| $600,000 | $3,699 | -$90 |
| $750,000 | $4,642 | -$113 |
| $1,000,000 | $6,165 | -$150 |
Source: Canstar. Notes: based on an owner-occupier paying principal and interest starting in August 2025. Calculations assume a cut in August and that the banks pass it on in full to existing variable customers the month after.
Bidding war for lowest rate ramps up
Canstar’s data insights director, Sally Tindall says, “Bank of Queensland’s cut today might be small but it’s a power move that puts it on the top of the lowest rate tables.”
“The question is, which bank will be next to trump them, in a bidding war that’s slowly but surely pushing fixed rates south.
“Fixed rates starting with a ‘4’ are now a firm fixture in the lowest rate tables with 18 lenders now in the under 5 per cent club.
“However, with the majority of borrowers still on variable rates, most will be wired to the news next Tuesday afternoon, hoping for that next cash rate cut.
“If the RBA cuts the cash rate next week, owner-occupiers paying down their debt should not be on a rate that’s over 5.50 per cent.
“In fact, if the majority of banks pass the cut on in full, which they should absolutely do, then there should be over 30 lenders offering at least one variable rate under 5.25 per cent, while CBA and Westpac’s lowest rates could hit 5.34 per cent.
“ANZ’s rate hike yesterday might have thrown some cold water over the competition between the big banks, however, with CBA and Westpac neck-and-neck for the title of the lowest big bank variable rate, let’s hope there’s still some fight left in this battle.”
Owner occupied
40% min deposit
Redraw facility
Owner occupied
20% min deposit
Redraw facility
Owner occupied
20% min deposit
Redraw facility
Owner occupied
10% min deposit
Redraw facility
Owner occupied
20% min deposit
Redraw facility
Owner occupied
30% min deposit
Redraw facility
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
- NAB joins tide of fixed rate cuts while ANZ rocks boat with variable rate hike
- What to expect from the RBA meeting in August 2025
- CPI data seals the deal for August RBA cut
- Compare Fixed Rate Home Loans
- Compare some of the lowest variable home loan rates
- Compare some of the best variable rate home loans
