BREAKING NEWSHuge Aussie bank DROPS interest rates - heres what you need to know

A major bank will start slashing fixed rates in a sign the major lenders are expecting big rates cuts in 2025.

Macquarie Bank is cutting its two-year fixed rate by 20 basis points to 5.39 per cent on Thursday, down from 5.59 per cent for owner-occupier borrowers with a 30 per cent mortgage deposit.

This is now Australias lowest fixed rate with the 30-day interbank futures market expecting the Reserve Bank of Australia to cut rates four times in 2025.

Macquarie Banks rate is much lower than the Commonwealth Banks equivalent 6.29 per cent fixed rate for those paying off principal and interest. 

A major bank will start slashing fixed rates in a sign the major lenders are expecting big rates cuts in 2025

While RBA Governor Michele Bullock has ruled out relief before Christmas - from an existing 12-year high of 4.35 per cent - the futures market is expecting her board to cut rates by 100 basis points next year.

Expectations of big rate cuts means the banks are now offering lower fixed than variable rates.

Macquarie Banks variable rate is higher at 6.14 per cent, with its Macquarie Group parent company not expecting the first RBA rate cut until March 2025.

NAB, ANZ and Westpac are expecting the rate cutting to begin in February next year while the Commonwealth Bank, Australias biggest home lender, is now forecasting a December rate cut. 

Macquarie Bank is cutting its two-year fixed rate by 20 basis points to 5.39 per cent on Thursday, down from 5.59 per cent for owner-occupier borrowers with a 30 per cent mortgage deposit