Who has the cheapest interest rates out of CBA, ANZ, NAB & Westpac?

Australia’s four major banks have cut mortgage rates in response to the Reserve Bank’s decision to slash the official cash rate to a new historic low. Canstar takes a look at who is offering the lowest home loan variable rates.
Cheaper interest rates with big four banks after RBA cut
Inner-city Melbourne. Source: Kummeleon (Shutterstock)

The Reserve Bank board decided to cut the cash rate by 0.25 percentage points to 1.25% on Tuesday, marking the first change since the central bank lowered it to 1.5% in August 2016.

All eyes quickly turned to the banks, particularly the big four, to see how much they would reduce home loan interest rates by.

Commonwealth Bank and National Australia Bank have announced that they will pass on the full RBA cut, while ANZ and Westpac will partially reduce home loan interest rates.

Westpac also introduced a new special offer loan for first home buyers paying principal and interest (P&I), fixed for five years at 3.49% (comparison rate 4.52%).

The lowest variable rate out of the big four banks for owner occupiers paying P&I will be offered by NAB at 5.11% (comparison rate 5.24%).

Canstar’s finance expert Steve Mickenbecker said the lower standard variable rates will reduce repayments for customers on discounted packaged home loans.

But even so, Mr Mickenbecker said there were still much better rates in the market than the big four’s packaged home loan rates which many customers have been sold.

“Even the big four banks have better rates on offer for new customers than what most of their customers are paying,” he said.

“Sure, there may be another cash rate cut and lower variable rates to come, but it pays to look around now and compare what your bank is offering new customers and say ‘I want some of that’.”

Mr Mickenbecker said smaller lenders were also offering competitive rates, with Reduce Home Loans now offering the lowest owner occupier variable rate on Canstar’s database.

Reduce Home Loans Rate Slasher owner occupier variable rate for customers paying P&I has dropped to 3.19% (comparison rate 3.19%).

Below we break down how the major banks’ new interest rates compare against what’s currently on offer across the market.

Owner-occupier home loan interest rates

Principal and interest repayments

Savings for the big four banks’ owner-occupier customers paying P&I will range from $44 to $62 a month, or $528 to $744 a year based on a mortgage of $400,000 paid over 30 years. Listed in alphabetical order, is a breakdown of the major banks rate changes.

Owner Occupier Variable Home Loan Comparison (Principal & Interest Repayments)
Bank Rate Change (percentage points) New Rate Comparison Rate Effective Date
ANZ -0.18 5.18% 5.28% 14 June 2019
CBA -0.25 5.12% 5.27% 25 June 2019
NAB -0.25 5.11% 5.24% 14 June 2019
Westpac -0.20 5.18% 5.32% 18 June 2019
Source: Canstar.com.au. Interest rates, comparison rates and effective dates provided by ANZ, CBA, NAB and Westpac.

Interest-only repayments

The lowest standard variable mortgage rate for owner occupiers paying interest only is currently 3.54% (comparison rate 3.59%), Canstar’s home loan database shows. Below is what the big four are doing, listed in alphabetical order.

Owner Occupier Variable Home Loan Comparison (Interest-only Repayments)
Bank Rate Change (percentage points) New Rate Comparison Rate Effective Date
ANZ -0.18 5.73% 5.50% 14 June 2019
CBA -0.25 5.67% 5.48% 25 June 2019
NAB -0.25 5.68% 5.47% 14 June 2019
Westpac -0.20 5.77% 5.91% 18 June 2019
Source: Canstar.com.au. Interest rates, comparison rates and effective dates provided by ANZ, CBA, NAB and Westpac.

Investment home loan interest rates

Principal and interest repayments

The lowest standard variable mortgage rate for investors paying P&I is currently 3.44% (comparison rate 3.48%), Canstar’s home loan database shows. Below is what the big four are doing, listed in alphabetical order.

Investment Variable Home Loan Comparison (Principal & Interest Repayments)
Bank Rate Change (percentage points) New Rate Comparison Rate Effective Date
ANZ -0.18 5.78% 5.88% 14 June 2019
CBA -0.25 5.70% 5.84% 25 June 2019
NAB -0.25 5.71% 5.84% 14 June 2019
Westpac -0.20 5.73% 5.87% 18 June 2019
Source: Canstar.com.au. Interest rates, comparison rates and effective dates provided by ANZ, CBA, NAB and Westpac.

Interest-only repayments

The lowest standard variable mortgage rate for investors paying interest only is currently 3.84% (comparison rate 3.74%), Canstar’s home loan database shows. Below is what the big four are doing, listed in alphabetical order.

Investment Variable Home Loan Comparison (Interest-only Repayments)
Bank Rate Change (percentage points) New Rate Comparison Rate Effective Date
ANZ -0.18 6.24% 6.07% 14 June 2019
CBA -0.25 6.14% 6.02% 25 June 2019
NAB -0.25 6.16% 6.02% 14 June 2019
Westpac -0.35 6.09% 6.22% 18 June 2019
Source: Canstar.com.au. Interest rates, comparison rates and effective dates provided by ANZ, CBA, NAB and Westpac.

Share this article