RBA February 2025 rate cut: Banks yet to pass on cuts

Frustrated customers of the only lender in Australia refusing to pass on the RBA’s historic interest rates cut have unleashed on their bank via social media.

More than 100 lenders have passed on rate cuts since the RBA finally pulled the trigger at its February meeting, but one bank has refused to budge.

Of course, the big four were quick to act following the RBA’s first rate cut in more than four years, but a Finder analysis revealed reaction times varied between other lenders, as did the amount of time it would take for the relief to flow through to customers’ interest payments.

At the time of publishing, customers at the vast majority of banks are already being charged a new, lower rate of interest, with new rates to kick in soon for the ones that weren’t.

However, those with loans at Virgin Money should not hold their breath for a discount.

Why? The lender announced it wouldn’t be moving rates.

MORE: ZERO return: Warning for savers after rate cut

“Variable home loan interest rates for new and existing loans will remain unchanged following the RBA’s February 2025 cash rate change,” Virgin’s updated rate hub page reports.

An interesting stance considering that the lender passed on the most recent RBA cash rate increase, back in 2023. Even more interesting considering Virgin Money promptly slashed 0.35 per cent from the interest it gives savers using its Boost Saver Account; a 10 basis point greater drop than the RBA’s.

When I put this to Virgin Money, I expected a change of mind. Instead, they doubled down.

“Our rate decisions are well considered ensuring that we provide our customers with a competitive proposition aligned with our funding costs and the needs of all our stakeholders,” a spokesperson said. “Virgin Money home loans are competitive and remain aligned with market. For any customers concerned about their current financial situation, we encourage you to reach out to our dedicated teams who are here to listen and provide support. Having these conversations early can help us explore support options best suited to your needs.”

Virgin Money customers have been quick to vent their frustrations on the lender’s social media accounts over the decision not to cut rates.

Borrowers will get more buying power with a rate cut. Picture: Tim Hunter.

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“Currently negotiating a new deal with another bank. You’ll have lost home loan and credit cards with us because of the greed,” posted Kelly Schuppe.

“You applied every increase the RBA put on us but now there is a cut and you won’t pass it on? Absolutely grubby pieces of junk you are. Good luck with an empty bank with no customers we will all be looking to move on if there isn’t immediate change,” said Matt O’Neill.

“The biggest scam is Virgin Money profiting from the RBA cut and refusing to pass it onto loyal customers,” said Kin Mrap.

“Reduce interest rates… crooks,” said Jason Barber.

The RBA’s 25-basis-point reduction to the official cash rate announced on 18 February brought it down to 4.10 per cent from 4.35 per cent.

Interest rates haven’t been cut by the RBA since 2022.

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It was the first rate cut since 2020 and follows 13 consecutive hikes that pushed rates to their highest level since 2011.

Commonwealth Bank, ANZ, NAB and Westpac quickly announced they would implement the full 25-point reduction.

Collectively, the big four hold $1.546 trillion in owner-occupied mortgages – or nearly 72 per cent of the market – according to Finder’s analysis of Australian Prudential Regulation Authority (APRA) data.

Australian mortgage holders will save $103 a month now that the rate cut has been passed on in full by lenders, based on the average home loan of $641,416.

Graham Cooke, head of consumer research at Finder, said Aussie homeowners have a right to be upset if their lender isn’t announcing a cut.

Finder.com.au head of consumer research Graham Cooke has urged borrowers to shop around for the best deal.

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“Every extra day without a cut leaves many Aussie homeowners with tighter budgets,” he said.

“If your bank isn’t looking out for you when all eyes are on an RBA cut, when will it?”

Cooke said refinancing is the best way to save on your mortgage costs.

“Social media was full of Aussies celebrating their bank announcing a 25-point cut on Tuesday – and it was refreshing to see some lenders announce they will be passing on the full rate cut,” he said.

MORE: Rate cut: Winners and surprise losers

“The reality is you can likely save more than a couple rate cuts by switching to a better deal.

“A reduction of even half a per cent can be the difference of thousands of dollars a year.

“Shop around to find a variable home loan that offers a lower interest rate than your current provider. The very lowest rates now have a ‘5’ in front of them.”

Banks who have passed on the cut so far

NAB- New lowest rate 6.19%- Effective 28 February