Four questions Macquarie Bank says you should ask your bank next rate cut

With another official rate cut on the horizon, Macquarie Bank is urging Australian homeowners and savers to ask their bank four questions to make sure they’re getting the best deal.

This year kicked off the first rate cutting cycle for the Reserve Bank of Australia (RBA) since 2020, with the official cash rate reduced by 0.5% following decisions by the RBA in February and May. With further cuts expected, Macquarie Bank says Australians wanting the best deal should be asking their bank:

1. When will you cut the interest rate on my home loan?

If your bank announces that it’s cutting the interest rate on your variable home loan, ask them when it will take effect. Following the last rate cut in May, Australian banks waited an average of 12 days before passing on the savings from lower rates to homeowners.

2. Will my home loan repayments be adjusted automatically?

If you want more money in your pocket at the end of each month, you probably need to do some legwork. Most banks won’t automatically lower your minimum monthly repayments to match your new rate, so you might need to go online, give your bank a call or visit a branch to request a change. If you can afford to keep your repayments the same, then you could pay off your mortgage faster.

3. Are you dropping my savings account rate before my home loan rate?

When banks lower home loan rates, they typically lower the rate they pay to their deposit and savings customers too. The catch? In May, some Australian banks earned millions by dropping the rate on their savings products several days before they started passing on home loan rate cuts.

4. Have I jumped through all the hoops to get the savings rate I signed up for?

Around 70% of Australian savers are failing to meet the monthly conditions on their savings account.¹ Many banks require customers to jump through multiple hoops - such as minimum deposits and transactions or restrictions on withdrawals - to unlock their “bonus interest” rate¹ each month. If these conditions aren’t met, the ongoing variable rates can drop to around 0.17% on average² costing the average saver almost $80 each month.³ These complex conditions on most savings accounts remain during rate cutting cycles and will continue to trip up many savers.

Australians need a ‘rate cut refresher’

Ben Perham, Head of Personal Banking at Macquarie Bank, said: “It’s been a long time since a rate cutting cycle and many Australians with a mortgage or savings account may need a rate cut refresher. The questions you need to ask your bank in a falling rate environment are different, and the answers they give you could cost you thousands. If you’re not getting the best deal, it’s time to switch.”

Macquarie was the fastest major bank to pass on the full rate cut in May and automatically adjusts minimum monthly repayments for its home loan customers. Macquarie has also made it easier for customers to get a great return on their savings with no fees, hoops or catches to earn the highest ongoing rate of interest.

“It’s natural in a rate cutting environment to focus on how much you’ll save on your mortgage each month,” Perham said. “However, it’s never been more important to check you’re actually being paid interest on your savings too. Most Australians don’t realise they’re getting nothing in interest because of the restrictive conditions and hoops many of our peers use to trip them up. We’ve done away with these conditions because we think they’re unfair and banking shouldn’t be hard work.”

1. Final Report: Retail deposits inquiry, Australian Competition & Consumer Commission 
2. Based on an average calculation of ongoing variable rates from the major banks and ING
3. Calculation based on industry average savings balance of $22,067 (sourced from RFI Retail Deposits Tracker) and industry average conditional and base rates on savings accounts offered by Australia's five largest household deposit holders (excluding Macquarie).