Tags: Interest rates
Yesterday as a surprise to many the Reserve Bank of Australia reduced its official cash rate by 0.25%. Making the new official cash rate 1.75% the first movement since May 2015.
It appears the Reserve Bank has reacted to concerns around the relative strength of the Australian Dollar and the impact this is having on exporters and tourism, talk of a slowing housing market and new data showing inflation has dropped below their target range of 2.5 – 3%.
But with the stated increase in funding and regulatory costs not all banks will pass on full RBA rate cut.
Our data is showing ANZ Bank being the only major lender not to pass on the full rate cut to its home loan customers.
ANZ Bank will instead reduce its home loan rates by 0.19%, with its benchmark rate for owner-occupiers falling to 5.37 per cent.
The NAB, Westpac, Commonwealth Bank and Bank of Queensland have said they would pass on the full RBA cut.
How does this impact the average mortgage holder? Here is a table showing how Australia’s average mortgage sizes may be affected:
|Loan amount examples||Likely decrease in repayments|
|$150,000||$31 per month|
|$250,000||$52 per month|
|$350,000||$72 per month|
|$450,000||$93 per month|
|$550,000||$114 per month|
|$650,000||$135 per month|
Therefore a fresh round of competition is likely to be sparked amongst lenders so it is a great time for us to review current finance arrangements.
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