NAB, ANZ and Westpac follow CBA in reducing home loans after RBA emergency rate cut

The Reserve Bank of Australia (RBA) cut the official cash rate to a historic low of 0.25% yesterday, the second cut in a month and the first out-of-cycle reduction since 1997.

In a statement, RBA Governor Philip Lowe said the move was designed to help stabilise the economy, amid widespread disruption caused by the global COVID-19 outbreak.

He said the cash rate could remain at 0.25% for some time, “until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2-3% target band”.

Hot on the heels of the announcement, Commonwealth Bank was the first of the big four to say it would slash interest rates on some of its home loans, issuing a statement within four minutes after the RBA’s decision.

We’ve reduced by 70bps to an all-time low interest rate of 2.29% for 1,2 and 3 year fixed home loan customers, with no change to the SVR.

— CBA Newsroom (@CBAnewsroom) March 19, 2020

Today, NAB, Westpac and ANZ have followed in CBA’s footsteps by announcing their own fixed and variable rate cuts for customers.

Below is a breakdown of the home loan reductions made by the big 4 banks, following the emergency rate cut.

Commonwealth Bank cuts to home loan rates:

CBA will cut its 1, 2 and 3-year fixed home loans by 70 basis points to an “all-time low” of 2.29% from 30 March, but at this stage is not moving on variable rates.

The bank will also reduce home loan direct debit repayments down to the minimum payment required from 1 May and will increase their 12-month term deposits by 60 basis points to 1.70%, effective 19 March.

National Australia Bank cuts to home loan rates:

NAB announced via X this morning that it will be cutting its fixed rate home loans by up to 60 basis points, without changing its variable rates.

Effective from 25 March, reductions for NAB’s owner-occupier fixed rate loans will be as follows:

• 1-year fixed: 2.39% (reduction of 60 basis points, comparison rate to be advised by NAB)
• 2-and 3-year fixed: 2.29% (reduction of 60 basis points, comparison rate to be advised by NAB)
• 4-and 5-year fixed: 2.79% (reduction of 20 basis points, comparison rate to be advised by NAB)
• First home buyers 2-year fixed: 2.19% (reduction of 60 basis points, comparison rate to be advised by NAB).

NAB will also allow some of its variable home loan customers to pause their home loan repayments for up to six months, including a checkpoint (or review) after three months.

https://twitter.com/NAB/status/1240801431675797506

Westpac cuts to home loan rates:

Westpac’s reductions apply to fixed rate home loans for owner-occupied customers on principal and interest repayments with a Premier Advantage Package.

The reduced rate of 2.29% will come into place on 27 March for 1, 2 and 3 year fixed loans, with no change to variable rates at this stage.

In a statement, Westpac said customers who have “lost their job or suffered loss of income as a result of COVID-19 should contact [the bank] for three months deferral on their home loan mortgage repayments, with extension for a further three months available after review”.

Today we have introduced a support package to help personal banking and small business customers affected by the COVID-19 situation.

For more information and to find out if you are eligible visit https://t.co/nFju3avKsV or any Westpac Branch. pic.twitter.com/6YELjpyHLr

— Westpac Bank (@Westpac) March 20, 2020

ANZ cuts to home loan rates:

ANZ was the last of the big four to announce its home loan rate reductions for customers following the emergency RBA cut.

In a statement on Friday, the bank said it will cut all variable interest home loans rates by 15 basis points (effective from 27 March), becoming the first of the big four to cut variable rates following the RBA’s emergency decision yesterday. On top of this, ANZ said it will introduce a 2-year fixed rate of 2.19% (comparison rate to be advised) for owner-occupiers paying principal and interest, the lowest on record for the bank.

ANZ said customers can also request a deferral of their home loan repayments for up to six months, with a review at three months (interest will continue to build up over this time and be added to the outstanding loan balance).

ANZ launches major COVID-19 support package, including a reduction in variable home loan rates of 0.15% https://t.co/Guv0lN3i8x pic.twitter.com/MKkFclha7l

— ANZ Newsroom (@ANZ_Newsroom) March 20, 2020

Lowest variable rates of the Big 4

Prior to yesterday’s RBA announcement, National Australia Bank (NAB) had the lowest variable rate on offer of the big four banks – NAB, ANZ, Westpac and Commonwealth Bank (CBA) – at 2.84% (comparison rate 2.84%).

Follow Canstar on Facebook and X for regular financial updates.

As with all our content, Canstar’s Coronavirus coverage will always be free for our readers.