The RBA Moved — So Why Didn't Your Mortgage Rate?

Every RBA announcement, the same thing happens: headlines about the cash rate, then a wave of borrowers checking their banking app and wondering why nothing changed — or why their rate moved by a different amount than the RBA’s.

Here’s how it actually works.

The cash rate isn’t your rate

The RBA cash rate is the interest rate banks pay to borrow from each other overnight. It’s the foundation of what your lender charges you — but your mortgage rate sits well above it, because your lender adds a margin to cover funding costs, risk, operations and profit.

That margin is the part nobody announces. It’s also the part that varies enormously between lenders — and between customers of the same lender.

What happens when the RBA cuts

When the cash rate falls, three things can happen to your loan:

1. Full pass-through. Your lender drops variable rates by the full amount. This usually happens when competition is hot and the lender wants headlines.
2. Partial pass-through. The lender passes on some of the cut and keeps the rest. They’ll cite “funding costs”. Sometimes that’s genuine; sometimes it’s margin expansion.
3. Pass-through for new customers only. The advertised rate for new borrowers falls, while existing customers stay where they were. This is the famous loyalty tax — and it’s the single most common reason long-term customers end up paying well above the market.

The reverse applies to hikes, except lenders have historically been faster and more complete passing those on. Funny, that.

Fixed rates move before the RBA does

If you’re watching the cash rate to time a fixed rate, you’re watching the wrong thing. Fixed rates are priced off what markets expect the RBA to do over the fixed term, not what it just did. By the time a cut is announced, it’s usually already baked into fixed pricing — sometimes months earlier.

That’s why fixed rates sometimes fall while the cash rate is still flat, and why they can rise the moment markets sniff inflation, with no RBA meeting in sight.

What this means in practice

• After any RBA move, check what your lender actually did — not what the headlines said. Your rate change (or non-change) arrives by letter or app notification, often weeks later.
• Compare your rate against what your lender offers new customers for the same loan. If there’s a gap, you’re paying the loyalty tax. A single phone call asking for a “retention review” sometimes closes part of it.
• If your loan hasn’t been reviewed in over a year, the gap between your rate and the current market may have grown through several RBA cycles without you noticing.

The current RBA cash rate and indicative market averages are shown live on our homepage, and our rate comparison tools can show you what a difference of even 0.30% could mean over the life of your loan.

Where a broker fits

We can’t control the RBA. What we can do is check, across a wide panel of lenders, whether your current rate is still competitive for your situation — and if it isn’t, handle the comparison, the retention negotiation with your current lender, or the refinance if moving turns out to be worthwhile after costs.

A review takes about 20 minutes and there’s usually no cost to you — if you refinance, the lender pays us a commission, which we always disclose in writing.

Book a free rate review — or try the rate check on our homepage first to see how your rate compares.

This article is general information only and doesn’t consider your objectives, financial situation or needs. Rates and lender policies change frequently. Consider whether the information suits your circumstances before acting on it.