Big Four banks announce sweeping interest rate cuts to help millions of homeowners amid challenging economic climate
Australia's Big Four banks have committed to reducing interest rates in an attempt to deliver much-needed financial relief to the nation grappling with the brutal impacts of post-pandemic inflation.
The major announcement comes after the Reserve Bank of Australia on Tuesday afternoon lowered the cash rate from 4.1 per cent to 3.85 per cent.
Westpac, NAB, ANZ and Commonwealth Bank revealed shortly after they would pass the rate cut for the millions of Aussie homeowners that bank with the Big Four.
NAB was the first to step in and pass on the RBA'S interest rate cuts to its customers by decreasing its standard variable home loan interest rate by 0.25 per cent p.a.
Customers who bank with NAB can expect the changes to kick in from May 30, although 95 per cent of its customers opted to keep their repayments at the same level when rates last decreased.
Shortly after NAB's announcement, ANZ committed to lowering interest rates for variable rate home loan customers by 0.25 per cent, also passing on the Reserve Bank's cut in full.
ANZ Group Executive Australia Retail Maile Carnegie said: 'The RBA's second rate cut will be another welcome reprieve for our home loan customers, who have been facing high cost of living pressures for some time."
'While Australians have shown great resilience, facing economic challenges directly and adapting to rising costs and uncertainty, some may still be struggling. We remain committed to supporting our customers through tailored solutions and urge them to reach out sooner rather than later to discuss options for any additional support required."
Commonwealth Bank dropped home loan variable interest rates by 0.25 per cent p.a. to deliver "much-needed additional relief for many Australians with a mortgage".
ANZ and CBA is also expected to pass the rate cuts from May 30.
Lastly, Westpac joined the major banks to decrease home loan variable interest rates by 0.25 per cent p.a. for new and existing customers.
However, the changes will kick in from June 3.
Additionally, Westpac Life total variable rate with bonus interest will decrease by 0.25 per cent p.a. to 4.0 per cent p.a., effective from May 30.
Treasurer Jim Chalmers welcomed the RBA's cash cuts and said it is a "welcome relief" for millions of Australians.
"This is the second interest rate cut in the last three months," he said.
"This is very welcome relief for millions of Australians. We are really pleased to see more help is on the way. And that's what this decision today is all about.
"To give you a sense of the benefits, the average benefits for Australians with a mortgage, this decision today for a $500,000 mortgage means $79 a month, or $947 a year.
"For someone with a $750,000 mortgage: $118 a month or $1,420 a year."
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