Some of Australia's biggest banks found themselves in the headlines this week after confirming that they were reducing a handful of their interest rates.

The rate cuts however weren't universally applied: they affected term deposits with some banks and home loans with others, and came days after the Reserve Bank of Australia reiterated it wasn't rushing to lower interest rates anytime soon.

So why are the banks cutting interest rates even though the RBA isn't, and what does it mean for households?

Let's unpack it.

What banks have cut interest rates?

The banks don't always publicly shout their rate changes from the rooftops — so we asked RateCity.com.au to crunch the numbers for term deposits and home loans. (We'll come back to mortgages in a moment.)

Since the start of August, 23 banks have cut interest rates on at least one of their term deposits, including Commonwealth Bank, NAB and ANZ.

CBA was the first of the major banks to cut almost all of its term deposit interest rates, reducing them by 0.5 percentage points a week ago, with NAB following by the same amount this week, while ANZ lowered its rates by up to 0.8 percentage points.

However, RateCity's Laine Gordon says the lowering of term deposit rates isn't surprising.

"Term deposits have been gradually dropping since the peak in July last year, based on a 12 month deposit," she told the ABC.

That said, RateCity's analysis shows 15 banks have increased rates on at least one of their term deposits since August 1.

"While most of the term deposit changes were cuts, there were also a number of banks lifting rates, including ANZ and NAB," Ms Gordon says.

"[They] lifted their highest rate to 4.8 per cent to meet CBA's highest offering, [while] CBA also hiked some products."

Overall, 27 banks have changed at least one term deposit rate since the start of August, with some having both hiked and cut rates.

The sticking point though is that all of these changes are for new customers — so if you've currently got some cash sitting in a term deposit, you won't be affected by cuts (or hikes).

Have any banks cut rates for mortgages?

Yes, but it's not as widespread as with term deposits — and it's only for new home loan customers.

RateCity's analysis shows only 11 lenders have cut fixed rates, and five have cut their variable rates since the start of August. (Some lenders have done both to different products.)

On Wednesday, Westpac cut some of its package fixed rates, including its 2-5 year terms to 5.89 per cent for people with at least a 30 per cent deposit.

On Friday, CBA announced cuts to both its fixed and variable rates for its home loans.

The bank, which is Australia's biggest lender, cut fixed loans by up to 0.7 percentage points, while certain variable rates were reduced by up to 0.35 percentage points.

Ms Gordon says the changes to fixed rates is part of a "wider adjustment", and that the rates have also been dropping slowly over time, much like term deposits.

However, NAB was the first of the big four banks to make a cut to its fixed and variable mortgage rates.

It cut some variable rates in April, before cutting its three-year fixed rate loan in July.

Why are banks cutting some rates and not others?

From the banks' perspective, they argue they are constantly reviewing their rates and adjusting them as required to meet the needs of their customers and managing their costs.

But broadly, it's got to do with what central banks around the world are expected to do with interest rates, which in turn affects our banks.

Cherelle Murphy, EY's chief economist, says it's indicative of where the the global economy is going, which in turn affects financial markets.

"The US central bank is expected to start cutting rates, and the markets have priced that accordingly," she explains.

"What that means is that banks, which raise their money in a number of different ways, including on the wholesale funding markets both here in Australia and globally, are seeing lower rates.

"So they're pricing their retail customers according to those rates."

In other words, the rates our banks are being charged are coming down, meaning they're passing on those lower rates to new customers — even though the RBA hasn't lowered the cash rate.

"The banks are getting in ahead of this and trimming rates little by little," RateCity's Laine Gordon says.

Bank analyst Brian Johnson from MST says the rate changes aren't worth getting "too excited" over.

"We shouldn't get too excited by all this ... we're kind of in the Goldilocks scenario at the moment until [the RBA] cuts rates," he says.

"At the moment, not cutting rates is good for the banks. When you cut them, it's bad [for the banks]."

Will these interest rate cuts affect me?

Not unless you're taking out a new term deposit or home loan.

But even if you are in the market for a new term deposit to boost your savings, bank analyst Brian Johnson says you shouldn't be too concerned by the rate cuts. 

"The reality is, most funding for the Australian banks, about 60 per cent of it comes from deposits," he explains.

"What we can see at the moment is wholesale funding costs come down, and the proxy for that is term deposits, so term deposit rates come down.

"As far as how important it is, it's not that important, because what really matters is the 'at-call' special deposit rates."

An "at-call" or "call" deposit rate refers to an account that earns interest while still allowing customers to have access to it, Mr Johnson explains.

"So we've got Macquarie right now offering a call rate of 5.35 per cent, we've got CommBank offering a call rate of 5.1 per cent," he says.

"I think the real danger is that we overstate the supposed savings that flows through from these [term deposit] rates, because the at-call rates are still incredibly high.

Cherelle Murphy from EY agrees that recent headlines about rate cuts "got a bit blown up".

"The reality is, it does change for the marginal consumer who's taking on a new loan or putting on a new deposit," she says.

"But most people won't see it, feel it, or know anything about it."

When do the banks think the RBA will cut rates?

Although the central bank has ruled out any chance of a rate cut this year, the big four banks aren't so convinced.

Both the Commonwealth Bank and Westpac are predicting that the RBA will start lowering the cash rate late this year, and could occur in November.

ANZ economists think that the first round of cuts are likely to occur around February 2025, while NAB think the central bank will hold off on lowering rates until May 2025.

One thing the big four can agree on though is that the RBA won't hike rates any more — they all say the current level of 4.35 per cent is the peak, despite the central bank's messaging that it won't hesitate to lift rates if required to bring down inflation.

That said, we'll get a better idea of what the RBA is thinking when it holds its next meeting in late September.