By Rebeccah Elley
For homeowners across the country, things are about to get exciting, after the Reserve Bank slashes the official exchange rate to an all-time high of 1.50%, at its board meeting. August.
Outgoing RBA Governor Glenn Stevens explained that “low interest rates are supporting domestic demand and the decline in the exchange rate since 2013 is helping the market sector.”
“These factors all help the economy make the necessary economic adjustments, although an appreciation in the exchange rate can complicate this.”
Now all that remains is to wait and see if lenders follow suit and pass this 25 basis point reduction on to home loan customers.
Australia’s largest bank, CommBank, was quick to announce on Twitter that it would pass just 0.13% on its standard adjustable rate mortgages, taking the homeowner’s rate to 5.22% to from August 19.
âWhile the circumstances of every RBA rate decision always vary, we have carefully considered the current environment and the needs of borrowers and savers,â said Matt Comyn, Group Executive at CommBank in a statement.
Next closely, big bank competitor NAB has also announced that it will cut rates, but like CommBank it will fail to pass on the full 25 basis points, opting instead for a 0.10% rate cut. raising its standard variable interest rate to 5.25% against August 19.
> ANZ has announced that it will reduce its variable rate by 12 basis points from August 12, bringing its homeowner rate to 5.25%. And Westpac will drop 14 basis points to 5.29% from August 23. St. George, which is part of the Westpac group, will also see the same 0.14% rate cut.
The first announcement of a smaller home loan provider came from Bank Australia, with good news for borrowers cutting its variable rate loans by 0.25%, taking it to 4.74% as of August 5 .
Other lenders who passed on some or all of the RBA’s 25 basis point rate cut include:
- CHA: Down 10 basis points, AMP’s new standard variable rate from August 19 will stand at 5.43%.
- Bank of Melbourne: From August 23, his mortgage at standard variable rate for owner-occupiers will be reduced from 0.13% to 5.22%.
- Bank of Queensland: For homeowner borrowers, the Bank of Queensland will apply a reduction of 0.15% (0.10% for investors). Thus, the new rate for the Clear Path mortgage loan from BOQ will be 4.32%.
- Bank of Sydney: This small supplier will lower its prices from 0.25% to 5.59% (the date remains to be confirmed).
- Bank SA: While a reduction of only 0.13% will be applied to BankSA’s standard variable rate (bringing it down to 5.29%), the rate cut will begin on August 5.
- Bankwest: Bankwest, the lender owned by CommBank, will only pass 0.10% from August 23, which will see its standard variable rate for homeowners drop to 5.35%.
- Bendigo Bank: 0.10% will be applied to the variable rate of Bendigo Bank from August 29. The new standard variable rate will be 5.38%.
- Citibank: 15 basis points will be removed from Citibank’s variable rate loans, bringing the new standard variable rate to 5.58%. Customers will have to wait until August 23 for the rate reduction to take effect.
- AUC: CUA customers will receive a 0.12% rate reduction, bringing the owner-occupant rate to 4.69% starting August 18.
- Big Bank: The variable mortgage rates will be reduced by 10 basis points, bringing the standard variable mortgage rate to 4.65%. The rate cut will be applied to new loans from August 8 and to existing loans from August 15.
- G&C Mutual Bank: While this lender will also pass on only 0.10% (new SVR: 5.15%), it will be applied early from August 5.
- Home star: The Homestar online lender has joined the few lenders who are passing on the full 0.25% rate cut. From August 4, its new standard variable rate will only be 3.48%.
- IMB Bank: True to the trend, IMB Bank has followed other lenders by also applying a 0.10% rate cut, which will take effect from August 24 and will see its homeowner rate drop to 4.99%.
- iMortgage: While 10 basis points may not seem like much, with iMortgage the new SVR will be at 4.05% – effective August 9.
- ING Direct: From August 15, ING’s Orange Advantage variable rates will fall by 0.12%, bringing its new standard variable rate to 4.55%.
- Macquarie: This mortgage lender’s standard variable rate will drop from 0.15% to 4.09%, effective August 8.
- Bank ME: ME Bank customers will receive a 0.10% discount after August 23. This will bring the rate attached to his flexible home loan to 4.93%.
- My fund: This mutual provider will apply a rate cut of 10 basis points, which will take place from August 9 and will bring its SVR to 4.54%.
- Newcastle permanent: 10 basis points seems to be the popular figure, as Newcastle Permanent has also announced that this will be applied to its variable rates from August 19 (New SVR: 4.95%).
- Credit union of choice: By slipping 13 basis points on its SVR, customers after August 19 will be charged 5.21%.
- P&N Bank: After August 26, this member-owned bank will reduce its floating rate to 5.14%, by 25 full basis points.
- RAMS: Borrowers with RAMS will benefit from a 0.10% rate cut from August 23. This will see its homeowner rate drop to 5.20% as of August 23.
- Suncorp: Another lender that only passed on a 10 basis point cut is Suncorp, cutting its variable rate to 5.40% from August 24.
- UBank: 3.97% will be the new customers of SVR UBank, after application of the rate reduction of 0.10% (from August 19).
- Virgin money: By lowering rates by 0.25%, Virgin Money’s standard variable home loan will drop to just 4.54% from August 8.
At Mozo, we’ll update this page as vendors announce their rate cuts or for more information on the RBA rate cut please visit our dedicated Reserve Bank page.