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Sky News AU
a day ago
- Business
- Sky News AU
Interest rates, inflation: CBA cuts home loan rates after RBA call
Australia's major banks have begun to move in the wake of Tuesday's RBA decision, with two of the four so far passing the rate cut on in full. The Reserve Bank of Australia cut the cash rate on Tuesday by 25 basis points, to 3.60 per cent for the third rate cut of the cycle. Commonwealth Bank announced its own cut about 45 minutes later, passing on the rate cut in full to variable rate home loan customers, effective from August 22. Westpac was not far behind, similarly passing on the cut in full to their variable home loan customers, however the change will not be implemented for another two weeks, making it effective from August 26. ANZ announced similar terms for borrowers, also decreasing variable rates by 25 basis points effective August 22. CBA Retail group executive Angus Sullivan said Australian mortgage holders are starting to get a little breathing room back in their budgets. 'It will be very welcome for those with a home loan,' he said. 'We can see people are responding to lower interest rates in different ways - some are covering everyday costs a little more comfortably, others are getting ahead on their home loans.' Mortgage holders with a $500,000 mortgage are set to save $2884 per year if the cash rate is passed on in full, while those owing $1m are tipped to save $5768 a year. This is on top of the first two interest rate cuts that the banks passed on in full back in February and May. Canstar data insights director Sally Tindall said the three interest rate cuts combined should mean Australians variable interest rates come in around 5.50 per cent. 'In fact, if the majority of banks pass the cut on in full, which they should absolutely do, then there should be over 30 lenders offering at least one variable rate under 5.25 per cent,' she said. 'Very welcome': Huge August rate cut hintHouse prices defy RBA rate hold Things are looking worse for savers though, with banks also looking to pass on the RBA's cuts to savings accounts. Westpac will pass on a 0.25 per cent cut to the variable rate of its Westpac Life with bonus interest account from August 22 - four days before the rate cut is passed on to home loan customers. New customers applying online for a variable rate Westpac eSaver account with a five-month introductory rate will also see the rate dropped from August 22. Originally published as Major banks move to slash interest rates on home loans following RBA cut
Perth Now
a day ago
- Business
- Perth Now
Major banks move on rates after RBA cut
Australia's major banks have begun to move in the wake of Tuesday's RBA decision, with two of the four so far passing the rate cut on in full. The Reserve Bank of Australia cut the cash rate on Tuesday by 25 basis points, to 3.60 per cent for the third rate cut of the cycle. Commonwealth Bank announced its own cut about 45 minutes later, passing on the rate cut in full to variable rate home loan customers, effective from August 22. Westpac was not far behind, similarly passing on the cut in full to their variable home loan customers, however the change will not be implemented for another two weeks, making it effective from August 26. ANZ announced similar terms for borrowers, also decreasing variable rates by 25 basis points effective August 22. The first big four bank has moved on interest rates. NewsWire Credit: NCA NewsWire CBA Retail group executive Angus Sullivan said Australian mortgage holders are starting to get a little breathing room back in their budgets. 'It will be very welcome for those with a home loan,' he said. 'We can see people are responding to lower interest rates in different ways - some are covering everyday costs a little more comfortably, others are getting ahead on their home loans.' Mortgage holders with a $500,000 mortgage are set to save $2884 per year if the cash rate is passed on in full, while those owing $1m are tipped to save $5768 a year. Australians in $500k debt will have $2884 more to spend a year following Tuesday's rate cut. Credit: News Corp Australia, NewsWire/ Monique Harmer This is on top of the first two interest rate cuts that the banks passed on in full back in February and May. Canstar data insights director Sally Tindall said the three interest rate cuts combined should mean Australians variable interest rates come in around 5.50 per cent. 'In fact, if the majority of banks pass the cut on in full, which they should absolutely do, then there should be over 30 lenders offering at least one variable rate under 5.25 per cent,' she said. Things are looking worse for savers though, with banks also looking to pass on the RBA's cuts to savings accounts. Westpac will pass on a 0.25 per cent cut to the variable rate of its Westpac Life with bonus interest account from August 22 - four days before the rate cut is passed on to home loan customers. New customers applying online for a variable rate Westpac eSaver account with a five-month introductory rate will also see the rate dropped from August 22.
ABC News
a day ago
- Business
- ABC News
How banks are responding to the Reserve Bank decision to cut interest rates
The Reserve Bank of Australia (RBA) cut the cash rate by 0.25 percentage points at the August monetary policy meeting. That means the RBA's cash rate target is now 3.60 per cent. Here's a breakdown of how Australia's Big Four banks have responded to the decision. We'll be updating this story as information comes through, so check back later if you don't see anything about the bank you're after. The Commonwealth Bank was the first bank to announce the cut in a statement. CBA Retail group executive, Angus Sullivan, said: "With now three rate cuts this year, Australian borrowers are getting some breathing room back in their budgets," he said. "We can see people are responding to lower interest rates in different ways — some are covering everyday costs a little more comfortably, others are getting ahead on their home loans." We are waiting on the ANZ, Westpac and NAB to respond to the news. Here's a list of some of the other major lenders in Australia. Don't see your bank listed here? It's probably worth checking their website and email correspondence, giving them a call or visiting a branch. The federal government's financial guidance website Moneysmart gives advice on this. It says before you switch, you should consider the following:
Yahoo
18-02-2025
- Business
- Yahoo
Major banks pass on RBA interest rate cuts to millions: 'Looking forward to relief'
NAB, Commonwealth Bank, and Westpac have all announced they will pass on the Reserve Bank of Australia's interest rate cut to customers. The central bank cut the official cash rate by 0.25 per cent to 4.10 per cent today, marking the first cut in more than four years. Three of the Big Four wasted no time in their own announcements and said they will follow in the central bank's steps. RELATED FOLLOW LIVE UPDATES: RBA interest rate decision to 'reignite' mortgage wars Dark side of RBA interest rate cut millions are waiting for: 'Disaster' Centrelink cash boost coming in weeks for millions of Australians Westpac revealed the following changes for home loan customers: It will decrease home loan variable interest rates by 0.25 per cent p.a. for new and existing customers, effective March 4. CBA will decrease home loan variable interest rates by 0.25 per cent p.a., which will be effective from February 28. 'We know that cash rate increases have been challenging for our home loan customers and they are looking forward to some relief," CBA's Group Executive, Retail Banking Services, Angus Sullivan said. NAB will reduce the standard variable home loan interest rate by 0.25 per cent, effective from February 28. 'We are very pleased to deliver this rate cut to home loan customers - we understand how tough it's been for many Australians," NAB Group Executive, Personal Bank, Ana Marinkovic said. 'The extended period of high interest rates has placed real strain on household budgets and this rate reduction will help to ease the financial burden." Canstar data insights director Sally Tindall told Yahoo Finance she expected lenders "big and small" to pass this rate cut on in full to all variable rate mortgage customers. 'When rates were on the rise, the big banks took 10 to 14 days to pass on a hike so there's no reason for them not to pass on cuts in the same timeframe, if not faster," she said. "Now rates are on the way down, triple-check your bank is passing on the rate cut in full, understand what your new rate will be but also check what you might get from a competitor." While banks generally follow cash rate movements, there is no guarantee they will. Of the 10 RBA rate cuts over the past 10 years, Canstar found only four were passed on in full by CBA, NAB and ANZ, with Westpac only passing on two. Borrowers will want to be looking for a home loan starting with a '5' to be competitive. Canstar research found more than 35 different lenders were offering at least one variable rate under 6 per cent to owner-occupiers. If lenders pass the 0.25 per cent cut on in full to new customers, then there could be more than 65 banks offering at least a rate starting with a '5'. Based on the current lowest rate, the new lowest rate would be 5.50 per cent after this cut. The average existing rate would be lowered to 6.07 per cent, while new customers would be on an average rate of 5.99 per in to access your portfolio
