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Sky News AU
7 days 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
7 days 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.
Yahoo
18-02-2025
- Business
- Yahoo
Major losers of RBA interest rate cut revealed: ‘Double-edged sword'
Aussie savers and retirees will be the major losers of the Reserve Bank of Australia's (RBA) cash rate cut today. The major banks have already started cutting rates on term deposits and savings accounts, revealing the 'double-edged sword' of lower rates. Westpac was the first of the major banks to confirm it would lower interest rates by the full 0.25 per cent on its Westpac Life and eSaver savings accounts. The rate cut will rate the total interest rate to 4.75 per cent for both savings accounts, effective February 28. Westpac chief executive consumer Jason Yetton said the bank considered a range of factors when making interest rate decisions, including the needs of both borrowers and savers. RELATED FOLLOW LIVE UPDATES: Major banks take swift action as RBA cuts interest rate to 4.1 per cent Dark side of RBA interest rate cut millions are waiting for: 'Disaster' RBA cuts interest rates delivering $1,236 in relief for mortgage holders 'Savers can continue to access competitive products, with headline interest rates still above the official cash rate,' Yetton said. 'Customers with a Westpac Life account can also receive bonus interest by boosting their balance by just one dollar each month. 'We're continuing to alert customers to this through our app, with 85 per cent of balances receiving this rate.'Commonwealth Bank, NAB and ANZ are yet to announce any changes to their savings account rates, with CBA noting it would maintain its current 10-month term deposit special of 4.60 per cent 'for a limited time'. Aussies currently have a whopping $1.571 trillion in household deposits with the banks, the latest APRA data found, up from $1.542 trillion in October 2024. 'While rate cuts may provide a financial lifeline for some home loan borrowers, lower rates may prove limiting for the many Australians who rely on cash deposits as a regular source of income,' InvestSMART Group CEO Ron Hodge said. 'This includes the 32 per cent of Australian homeowners who don't have a mortgage, and the nation's 4.2 million retirees.' All of the major banks already started cutting their term deposit rates ahead of the RBA's decision this week. NAB and ANZ made a range of cuts of up to 0.20 per cent, Westpac cutting its 11-month special rate by 0.05 per cent and CBA cutting rates by up to 0.95 per cent and making a small handful of hikes. Canstar data insights director Sally Tindall said Aussies with money in term deposits could get a 'shock' when their fixed period matures and they are faced with much lower interest rates. 'For those looking to lock up their hard-earned money in another term deposit, time may be of the essence,' she said. High-interest savings accounts are also expected to tumble following the RBA's move. 'Savers looking to extend the high-rate honeymoon for as long as possible should shop around for a competitive rate before they start to fall,' she said. 'Banks are expected to pass on cash rate cuts to their savings customers, however, moving your nest egg into a high interest saving rate should help cushion the blow.'
