Rate Cuts, Ensure that this is not a price rise in disguise

The Reserve Bank might have slashed the cash rate, but that doesn’t mean your lender has done you any favors. Many borrowers are left waiting—and paying more—while their bank decides when (or if) to pass on the savings.

While a rate cut should, in theory, lower your repayments, banks often hold back. This delay helps them preserve profit margins, especially when funding costs haven’t dropped as much as the cash rate. In some cases, it’s a matter of market strategy—holding rates steady while competitors move, or repricing other products quietly behind the scenes.

This can hit your back pocket. For example, on a $600,000 loan, even a 0.25% rate cut delay can cost you roughly $125 per month—or $1,500 per year. And with living costs rising, that money makes a real difference.

So what can you do? First, review your rate regularly. Lenders count on customer inaction. Second, compare what’s on offer—smaller banks and brokers often pass on cuts faster. Third, speak to a broker. At Rho Loans, we help clients assess their current loan against the market and, if necessary, refinance to a lender that values their business.

Just because your lender is slow to move doesn’t mean you have to be.