A major Australian bank has dropped its interest rates as economists speculate whether the Reserve Bank of Australia (RBA) will cut the cash rate at all this year. Macquarie Bank, Australia’s fifth-largest lender behind the Big Four, has cut its standard variable home loan rates — with some dropping as much as 0.10 percentage points.

Unfortunately, if you’re already with Macquarie these cuts won’t apply to you. They are just for new owner-occupiers committed to paying principal and interest repayments, who have a bigger deposit, or a loan-to-value ratio (LVR) of below 70 per cent.

Macquarie Bank’s lowest advertised variable rate is now 6.14 per cent, which finance expert David Koch told Yahoo Finance wasn’t the only out-of-cycle rate cut Australian borrowers could take advantage of.

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ME Bank has also moved on fixed interest rates, dropping by as much as 0.6 per cent on some offers.

“The RBA mightn’t budge over the next few months but that doesn’t mean homeowners should have to sit and suffer bad rates,” the Compare the Market economic director said.

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“Banks are competing hard to attract and retain customers but it’s really up to borrowers to force those moves.

“We have seen some banks apply drastic measures with some swooping in at the 11th hour with an incredible offer.”

Macquarie Bank grows home loan book with competitive rates

This isn’t the only interest rate cut Macquarie has delivered this year, dropping variable rates for customers with a 70 per cent LVR from 6.17 per cent to 6.15 per cent in February.

In January, it cut its basic variable home loan rates by up to 0.21 percentage points for new customers, with the biggest drop for owner-occupiers and investors with small deposits (10 per cent or less) who commit to paying principal and interest.

The bank also slashed its fixed rates by up to 0.56 percentage points and cut its three-year fixed rate down to 5.99 per cent for customers with a deposit of 30 per cent or more.

Macquarie is cementing itself as a competitor with the big four banks, growing its home loan market share to 5.3 per cent in March from 2.5 per cent in 2020, according to statistics from the Australian Prudential Regulation Authority.

When will interest rates come down?

The RBA board will meet on May 6 to determine the cash rate and are widely expected to hold. Economists are not factoring in a cut until much later in the year, if at all.