Reserve Bank (RBA) Governor Phillip Lowe said the cut was made with the primary focus of getting people back into work.
"The Board views addressing the high rate of unemployment as an important national priority," Dr Lowe said.
"Today's policy package, together with the earlier measures by the RBA, will help in this effort.
"The RBA's response is complementary to the significant steps taken by the Australian Government, including in the recent budget, to support jobs and economic growth."
The Board also announced an expansion of its Term Funding Facility and quantitative easing program.
See how the big four banks responded to the cut below:
You can also check out a comprehensive list of lenders and their respective rate cuts here.
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.06% p.a. | $3,011 | Principal & Interest | Variable | $0 | $530 | 90% | 4.6 Star Customer Ratings |
| Promoted | Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,995 | Principal & Interest | Variable | $0 | $0 | 80% | Apply in minutes |
| Promoted | Disclosure | |||||||||
6.09% p.a. | 6.11% p.a. | $3,027 | Principal & Interest | Variable | $0 | $250 | 60% |
| Promoted | Disclosure | ||||||||||
5.69% p.a. | 6.16% p.a. | $2,899 | Principal & Interest | Fixed | $0 | $530 | 90% |
| Promoted | Disclosure |
Commonwealth Bank rate cut
The first to announce, the morning after the RBA announcement, Commonwealth Bank (CBA) announced a range of cuts to fixed rates and business rates, but did not pass on the cut to variable rates.
The new fixed rate is CBA's lowest ever advertised home loan rate, and the cuts are effective from 11 November.
According to Commonwealth Bank:
- A 100 basis point (bps) reduction to 1.99% p.a. on new four year Fixed Rate home loans for Owner Occupiers paying Principal and Interest in the Wealth Package.
- A 15 bps reduction to 2.14% p.a. on two and three year Fixed Rate home loans for Owner Occupiers paying Principal and Interest in the Wealth Package;
- A 10 bps reduction to 2.19% p.a. on new one year Fixed Rate home loans for Owner Occupiers paying Principal and Interest in the Wealth Package.
- 2.99% p.a. secured and 3.99% p.a. unsecured business loans rates through the Government’s SME loan guarantee scheme, a reduction of up to 51 bps;
- 2.49% p.a. rates on new three, four and five year fully secured BetterBusiness loans, a reduction of approximately 50 bps.
*Note: Comparison rates not available yet*
What they said:
Angus Sullivan, Group Executive, Retail Banking Services at CBA, said yesterday's move by the RBA would provide confidence to Australians to borrow at historically low rates.
"We have reflected this in our interest rate settings, offering customers our lowest ever fixed rate – 1.99% fixed for four years – providing customers who fix some or all of their home loan with certainty and confidence into the future," Mr Sullivan said.
"We have also reduced the one, two and three year fixed rates for new owner-occupier loans by 10-15 bps.”
Mr Sullivan said borrowers could also gain confidence from CBA's announcement of a moratorium on foreclosures until September 2021.
"For Owner Occupier customers who made their home loan repayments on time for at least 12 months prior to their deferral, but are unable to recommence their full repayments, we will ensure they can remain in their home until at least September 2021.
"This will give these customers the confidence that they can remain in their home while they focus on improving their financial health."
Westpac rate cut
Shortly after midday, Westpac announced it would follow CBA's suit and offer a fixed rate below 2%, and made cuts to business rates. It also followed suit in not passing the cut onto variable rates.
The new fixed rates are effective from 9 November and are available with a Premier Advantage Package.
According to Westpac:
- 1 year owner occupier principal & interest fixed rate home loan decreasing by 0.20% p.a. to 2.09% p.a. (comparison rate 3.59% p.a.*)
- 2 year owner occupier principal & interest fixed rate home loan decreasing by 0.20% p.a. to 2.09% p.a. (comparison rate 3.50% p.a.*)
- 3 year owner occupier principal & interest fixed rate home loan decreasing by 0.20% p.a. to 2.09% p.a. (comparison rate 3.40% p.a.*)
- 4 year owner occupier principal & interest fixed rate home loan decreasing by 0.80% p.a. to 1.99% p.a. (comparison rate 3.29% p.a.*)
What they said:
Richard Burton, Westpac Acting Chief Executive Consumer Division, said the lender was committed to supporting customers, but also had to balance the interests of stakeholders through a historical period of monetary policy.
“We recognise it has been a tough time for many Australian households, and these changes mean that customers will be able to access even lower interest rates on our home loan and small business loans," Mr Burton said.
“However, we are in an extraordinary period with the official cash rate at a historical low and unconventional monetary policy measures in place.
"It is critical we carefully manage interest rate changes, while continuing to do our part in supporting customers and the economy."
NAB rate cut
Over a day after the RBA's announcement, NAB announced it would also not be cutting variable rates, but made cuts to fixed rates.
The lender also announced a 200 basis point cut to it's QuickBiz Business loan for the next three months. The loan allows you to borrown $5,000 to $250,000 at a rate of 8.95%, fixed for 1-3 years.
According to NAB:
- 10 bps cut to 1-year Advertised Fixed Rate to 2.19% p.a.
- 10 bps cut to 2-year Advertised Fixed Rate to 2.09% p.a.
- 20 bps cut to 3-year Advertised Fixed Rate to 2.09% p.a.
- 81 bps cut to 4-year Advertised Fixed Rate to 1.98% p.a.
*Note: Comparison rates not available yet*
What they said:
NAB Group Executive Personal Banking Rachel Slade said the changes were designed to provide certainty to customers and boost confidence.
“This is the sixth reduction in the cash rate during the past 18 months," Ms Slade said.
"With interest rates at record lows we are doing what we can to support homebuyers and business owners through COVID-19, while also balancing the impact on our deposit and savings customers.
“Australia has had our support from the beginning of this pandemic and we will continue to help our customers through to the other side.”
ANZ rate cut
Rounding out the big four, well over 24 hours after the RBA announcement, ANZ also announced they would not be cutting variable rates.
Instead, they made cuts to fixed rates and business loans, effective from 5 November and 11 November, respectively.
According to ANZ:
- One-year fixed rate of 2.09%pa (-0.30%pa)
- Two-year fixed rate of 2.09%pa (-0.20%pa)
- Three-year fixed rate of 2.09%pa (-0.20%pa)
- Four-year fixed rate of 2.29%pa (-0.40%pa)
- Five-year fixed rate of 2.29%pa (-0.40%pa)
- Decrease interest rate for unsecured Next Step Business Loan by 0.75%pa to 4.24%pa – backed by Government Guarantee
- New fixed rates from 2.85%pa for new vehicle and equipment purchases – backed by the Government Guarantee
*Note: Comparison rates not available yet*
What they said:
ANZ Group Executive, Australia Retail & Commercial, Mark Hand, said this year had provided some of the most challenging circumstances Australian had faced, and the lender was committed to the economic recovery.
“The RBA and the Government are rightly focussed on supporting the economy by making long-term financing cheaper for small businesses and households during this difficult period. ANZ continues to play its part," Mr Hand said.
“Since March we have maintained the lowest standard variable home loan index among the major banks for owner occupier customers paying principal and interest and we are pleased to still have the lowest today.
“For home loan customers looking for certainty with their repayments, they can consider the range of historically low fixed rate terms we have on offer.
“We have once again weighed up a number of factors in making this decision with our focus today on supporting business recovery while continuing to offer very competitive home loan rates to help our customers and the housing sector.”
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