Latest news with #borrowers relief
Daily Mail
7 days ago
- Business
- Daily Mail
Big Four banks make major call following RBA interest rate decision
All four major banks have announced an interest rate cut, providing welcome relief for borrowers following the Reserve Bank of Australia cutting the cash rate. The central bank on Tuesday cut the cash rate by 25 basis points to 3.6 per cent, but flagged the end to its easing cycle is getting closer. Macquarie Bank was first out of the gate, confirming it will pass on the full cut to customers from Friday. Australia's other major banks have also confirmed they will pass on the RBA's full 0.25 percentage point cut to their standard variable home loan rates. ANZ and CommBank will both implement the reduction from August 22, while NAB customers will see the change take effect on August 25. Westpac will be the last of the Big Four to introduce the rate cut on August 26. All nine board members voted in favor of a cut and there was no discussion of a jumbo 50 basis point cut, Ms Bullock said. The RBA's decision will save borrowers with a $600,000 mortgage almost $90 a month in repayments and a cumulative $272 per month since cuts began in February. The move brings the cash rate to its lowest level since May 2023, with the average variable mortgage rate expected to fall to 5.5 per cent. But for many borrowers, the financial boost was behind estimates. Most economists had expected the RBA to deliver rate relief in its July meeting. In a shock 6-3 decision, the board kept rates on hold, citing a need to wait for more inflation data to ensure price growth was coming down sustainably to target. The local share market lifted modestly and the Aussie dollar fell following the decision, while money markets were pricing in two more cuts by March. Vanguard senior economist Grant Feng predicted one more cut by the end of 2025, as growth showed signs of recovery and the unemployment rate stabilizing. Treasurer Jim Chalmers said the decision was 'very welcome relief for millions of Australians'. 'The three interest rate cuts we've seen this year would not have been possible without our collective efforts to get inflation down,' he said. The RBA has just cut interest rates for the third time in six months. Today's quarter of a percentage point cut brings the cash rate to 3.60 per cent and will make a meaningful difference to millions of mortgage holders around the country. In quarterly forecasts produced by RBA staff and released alongside the cash rate decision, productivity growth was revised down by 0.3 per cent over the medium term. That would flow through to lower GDP growth, lower living standards and make it harder to get inflation under control.
SBS Australia
12-08-2025
- Business
- SBS Australia
'Welcome relief': Banks pass on cuts, as Reserve Bank lowers interest rate to 3.6 per cent
Two of Australia's big four banks have vowed to pass on the 0.25 percentage point rate cut handed down by the Reserve Bank of Australia, after it announced a reduction in the cash rate from 3.85 to 3.6 per cent. CBA and Westpac announced they would pass the cut on in full to customers, as did Macquarie. Treasurer Jim Chalmers said the widely anticipated decision was "welcome relief" for borrowers and would "put more money in the pockets of people who are under pressure". Chalmers said Australians could thank themselves for lowering inflation but acknowledged that a cut to the official cash rate "won't solve every problem we have in our economy". It marks the third interest rate cut of the year, following similar reductions in February and May. My Bui, an economist at financial services firm AMP, told SBS On the Money podcast the announcement is "pretty much no surprise". She said the RBA economic outlook, also released today, points to more rate cuts in the coming months. "The RBA still sees the unemployment rate peaking slightly higher from now as well as inflation sustainably landing in the midpoint of the target, so for me that's a sign of more rate cuts to come," she said. Meanwhile, some economists have criticised the central bank's decision to wait until August to announce the cut. Diana Mousina, deputy chief economist at AMP, said: "I think it's the rate cut we didn't get in July." "I don't think the Reserve Bank should have waited and caused disappointment, and also caused confusion in the markets." Threat of trade war easing In a press conference announcing the decision, RBA governor Michele Bullock rejected questions about whether the board's rate-setting was restrictive. "The board will keep doing what it needs to do to keep inflation down and maintain a healthy jobs market because when inflation is low and stable and people can get jobs, it's good for households, it's good for the community and it's good for the broader Australian economy," she said. RBA governor Michele Bullock says global economic uncertainty remains even though the immediate threat of a trade war is easing. Source: AAP / Yuri Gripas "The global outlook remains unpredictable even though it seems that the risk of a more damaging, widespread trade war has eased a bit." "We don't have a point estimate for where we might end up. You'll note in the forecasts we have inflation coming back down to target and the unemployment remaining where it is, with a couple more cash rate cuts in there. That's the best sort of guess. But things can change." The board reiterated its commitment to maintaining full employment and price stability, though acknowledged that weak demand from consumers could lead to job losses.
