ANZ & CommBank Subsidiaries Cut Mortgage Rates as RBA Outlook Shifts
In a timely boost for Australian homebuyers, subsidiaries of two of the Big Four banks—Suncorp Bank (owned by ANZ) and Bankwest (owned by Commonwealth Bank)—announced variable home loan rate reductions on October 17, 2025, just days after Australian Bureau of Statistics (ABS) data revealed a sharper-than-expected rise in unemployment. The moves, effective immediately, reflect growing market anticipation of Reserve Bank of Australia (RBA) easing, with bond traders now pricing in a 25 basis point (bp) cash rate cut by December—three months ahead of prior expectations. While the RBA is widely tipped to hold at 3.6% in November, the softening labor market has reignited debates over an earlier pivot, potentially delivering relief to the 2.5 million variable-rate mortgage holders nationwide.
The Unemployment Shock: Fueling Rate Cut Hopes
The ABS reported on October 17 that Australia’s unemployment rate climbed to 4.5% in September—the highest since 2021 and up from 4.2% in August, surpassing economist forecasts of 4.3%. Employment edged up by just 14,900 (full-time roles rose 9,000, but women’s full-time jobs fell 15,000), while the unemployed tally swelled by 34,000 to 684,000. Participation ticked to 67%, but hours worked grew only 0.5%, signaling underlying weakness. ABS labour statistics head Sean Crick noted more people entering the workforce amid cooling demand, with hiring averaging a mere 12,900 monthly in 2025 versus 32,600 in 2024.
This “conflicting signals” mix—sticky inflation (next CPI due October 29) versus labor softening—has economists divided. NAB’s Taylor Nugent called it a “higher probability” for a November cut, while CBA’s Belinda Allen stuck to a February 2026 trim but conceded an “elevated chance” sooner. ANZ highlighted ongoing easing, complicating the RBA’s view of a “steady” market. IFM Investors’ Alex Joiner added the data “surprised” the central bank, potentially forcing a reassessment at the November 4 meeting.
Rate Cuts in Detail: Immediate Relief for Borrowers
The subsidiaries acted swiftly post-data, preempting any RBA move to stay competitive in a market where variable rates average 6.5-7%. Here’s a breakdown:
Suncorp Bank (ANZ Subsidiary):
- Slashed variable rates by up to 40bp across owner-occupier and investor products, targeting interest-only (IO) and principal & interest (P&I) repayments with loan-to-value ratios (LVRs) up to 80%.
- Key products affected (new rates include comparison rates in parentheses):
- Back to Basics Better Together (Special Offer): Owner-occupier IO (≤60% LVR): 5.69% (5.52%), down 30bp; Investor IO (≤70% LVR): 5.65% (5.56%), down 5bp.
- Home Package Plus: Owner-occupier IO (≤60% LVR): 5.79% (5.93%), down 30bp; Investor IO (≤70% LVR): 5.68% (5.93%), down 12bp; Investor P&I (>80% LVR): 6.14% (6.49%), down 20bp.
- One two-year fixed owner-occupier rate rose 10bp to 4.89% (5.75% comp), but overall variable cuts dominate.
- Eligibility: New loans ≥$150,000 linked to an Everyday Options Account; $375 annual fee for packages.
Bankwest (CommBank Subsidiary):
- Trimmed select variable rates by 10bp for owner-occupiers on P&I repayments (60-80% LVR).
- Affected products:
- Complete Home Loan: 5.49% (5.89% comp), down 10bp (includes offset and fee-free card; $395 annual fee).
- Simple Home Loan: 5.49% (5.52% comp), down 10bp (offset optional for $10/month).
- Lower LVRs get the best pricing; higher LVRs unchanged.
These cuts could save a typical $600,000 loan holder $50-200 monthly, easing the $120 billion in annual interest burden on households. They follow the RBA’s August 25bp trim (to 3.6%) and precede potential further passes-on if cuts materialize.
Broader Implications: Competition Heats Up
The actions underscore intensifying rivalry among lenders, as the Big Four (ANZ, CBA, NAB, Westpac) vie for market share amid stagnant housing activity. Westpac and NAB have held steady recently, but pressure mounts—especially with CBA forecasting persistent services inflation delaying relief. For borrowers, it’s a window to refinance: Tools like RateCity show average variable rates dipping to 6.2%, but fixed options (now 5.3-5.8%) may lock in gains. Risks? If inflation surprises hot, cuts could reverse, per ANZ’s Adelaide Timbrell, who eyes a final 2026 trim.
As Victoria’s jobless rate hits 4.7% amid weak growth, regional borrowers may feel the pinch most. For the latest RBA tea leaves or personalized calc, drop a line!