Latest news with #interestratecut
South China Morning Post
6 hours ago
- Business
- South China Morning Post
India expected to maintain robust growth despite Pakistan tensions, trade woes
India is poised to remain the world's fastest-growing major economy this year, analysts have said, with a recent jumbo rate cut by its central bank expected to boost consumption and investment, even as the country contends with fresh military tensions with Pakistan and an uncertain global trade environment. The Reserve Bank of India (RBI) last week delivered a larger-than-expected interest rate cut of 50 basis points and reduced the cash reserve ratio – the minimum amount of capital banks must park with the central bank – by one percentage point. The move is projected to inject about US$29.15 billion into the banking system by year-end. The surprise monetary easing followed robust economic performance, with gross domestic product expanding 7.4 per cent in the January to March quarter – an acceleration that helped prompt the RBI's pre-emptive push to sustain growth. 'It looks unlikely that India will be able to maintain the 7.4 per cent growth, but it should be able to record a growth of 6.5–7 per cent in this financial year [ending March 2026],' Sujan Hajra, chief economist and executive director at the Anand Rathi group, told This Week in Asia. A man walks past the rupee symbol outside the Reserve Bank of India headquarters in Mumbai on June 6. The central bank last week delivered a larger-than-expected interest rate cut of 50 basis points. Photo: AP India is set to overtake Japan as the world's fourth-largest economy by the end of this calendar year, according to projections by the International Monetary Fund. The impact of India's tensions with Pakistan and volatile global environment was likely to be offset by the central bank's monetary easing, Hajra said.
BBC News
5 days ago
- Business
- BBC News
RBI: India central bank delivers sharp rate cut as growth, inflation fall
India's central bank has lowered interest rates by a deeper-than-expected half a percent - the third cut in a row amid falling inflation and lower growth in Asia's third largest repo rate now stands at 5.5% - the lowest in three is the level at which the central bank lends money to commercial banks, influencing borrowing costs for home and car the rationale for the cut, RBI governor Sanjay Malhotra said growth is "lower than our aspirations" and the bank felt it was "imperative to stimulate domestic consumption and investment" amid rising global uncertainties. The rate cut comes on the back of two previous reductions in April and released last week showed that India's economy grew by 6.5% in the previous financial year ending country remains the world's fastest expanding major economy, although growth has sharply dropped from the 9.2% high recorded in financial year retail prices in India have slowed faster than expected to 3.16% in April - the lowest in six years - and below the RBI's 4% target, driven down by falling food has now forecast lower inflation than earlier projected for the year the central bank has changed its monetary policy stance from "accommodative" to "neutral", indicating that further rate cuts will depend on how India's growth-inflation dynamic fuller granaries due to a better-than-expected monsoon, weaker prices of commodities like oil - of which India is a net importer - as well as a strong currency are likely to help keep India's inflation in check in the months ahead, allowing the RBI to keep rates borrowing costs could have a positive growth impact due to improved purchasing power for households, lower input costs for companies and lower debt servicing costs for the will also help homebuyers and a struggling real estate sector."This effectively lowers the cost of borrowing, making home loan EMIs [mortgage payments] easier on the pocket and thereby directly improving affordability for buyers. This can potentially boost demand in the Indian real estate sector, especially in affordable and mid-income segments. Affordable housing faced the sharpest pandemic fallout, with sales and new launches shrinking in the top 7 cities," Anuj Puri, chairman of ANAROCK Group, said. Indian markets rallied sharply post the rate cut announcement.
News.com.au
02-06-2025
- Business
- News.com.au
Legal bank move could save you $144,000
May's interest rate cut – the second for 2025 – is great news for buyers and owners alike. Not only does it reduce interest costs, the rate cut also raises the borrowing capacity of aspiring buyers. But that's not all. The second rate cut appears to have reignited the 'mortgage wars ', with lenders becoming more competitive to secure new business amid widespread expectations of more rate cuts to come. We saw evidence of this when many lenders cut their fixed rates weeks before the Reserve Bank's meeting this month. Sally Tindall from Canstar told the media that fixed rate home loans had now fallen below 5 per cent. She also said that while it was normal to see fixed rates fall in anticipation of an RBA cash rate cut, some lenders were also cutting their variable rates for new customers at the same time. This indicates that competition is heating up, which is greatly beneficial for both new and existing borrowers. Home owners who already have a loan should stay in touch with their broker. A few more rate cuts might make refinancing to another lender offering a better deal worth your while. The latest prediction from Macquarie is three more 0.25 per cent rate cuts in July, August, and November. There is no guarantee this will happen, but it's reasonable to be optimistic given inflation is now back in the target 2 per cent to 3 per cent band. That was the Reserve Bank's main objective when it raised interest rates 13 times in just 18 months between 2022 and 2023. After the RBA meeting this month, Governor Michele Bullock said the board expected underlying inflation (that's the measure the RBA pays the most attention to) to hover about the midpoint of the target band over the next year or so. As for the impact on the property market, this second rate cut for 2025 is likely to boost activity a bit because it will give people extra confidence that we are now on a downward trend with rates. But I don't think we'll see a meaningful increase in market activity until we've had three or four rate cuts. If you have a home loan with NAB, CBA or ANZ, your rate cut went into effect last Friday. According to CBA, a 0.25 per cent rate cut is worth about $80 per month in savings for borrowers making principal and interest repayments on an average loan of $500,000. And since this is the second 0.25 per cent rate cut for 2025, the combined saving is about twice as much. But there's a catch. (If there are five rate cuts this year, you could save up to $144,000) Some banks require you to opt-in if you want to lower your overall monthly repayment after an interest rate cut. If you don't, the bank may keep your repayment amount the same, but increase the portion going to the principal and decrease the portion going to interest. Paying more principal, in theory, is a positive thing. But if you need the extra cash flow that rate cuts provide to help you cope with today's high cost of living, you might need to make a phone call. According to CBA, only 14 per cent of eligible borrowers called the bank to request that their home loan repayment be lowered after the first rate cut in February. This indicates that borrowers were either keen to accumulate extra redraw funds for a rainy day, or they didn't understand that their overall mortgage repayment would not be adjusted automatically. So, check your paperwork or call your bank to ensure your home loan repayment is adjusted in whatever way suits your individual circumstances.
Yahoo
26-05-2025
- Business
- Yahoo
19 Aussie lenders called out for not passing on interest rate cut as $76 million issue exposed
More than a dozen lenders still haven't revealed whether they're passing on the Reserve Bank of Australia's (RBA) interest rate cut. It's been nearly a week since the RBA handed out the year's second 0.25 per cent cut in the official cash rate. Many financial institutions moved within minutes of the board's announcement, revealing to customers they would pass on the cut in full in the coming days. However, there's a group made up of fairly small lenders who haven't revealed if they're providing mortgage relief or not to their homeowners. Historically, rate hikes are usually followed by every financial institution. But not everyone jumps on a cut. RELATED Mortgage broker's $70,000 trick to take advantage of RBA interest rate cut: 'Big difference'$3 million superannuation tax change sparks property warning as 'panic' selling begins ATO warning ahead of $1,288 cost-of-living cash boost: 'Shooting yourself in the foot' Canstar data insights director Sally Tindall told Yahoo Finance customers can vote with their feet if their bank doesn't pass on the rate cut. "Banks know better than most just how tough it has been for these customers over the last couple of years as higher rates and a higher cost of living have put pressure on their household budgets,' she said.'If you're on a variable rate, it's your right to pick up your mortgage and take it to a lender willing to offer you a better deal.' At the time of writing, these are the lenders who haven't yet announced if they're passing on the RBA's rate cut: Bank of China BankWAW Broken Hill Bank Cairns Bank Dnister Family First Credit Union First Option Bank Freedom Lend La Trobe Laboratories Credit Union Reduce South West Slopes Bank The Capricornian The Mac Transport Mutual Credit Union Warwick Credit Union Well Money Woolworths Team Bank Yard Everyone else has either already fired off mortgage relief or will hand it out in the coming days. Athena and Unloan dished out their interest rate cuts on the same day as the RBA meeting. Macquarie was the first major bank to pass it on in full on Friday, May 23. The RBA announced its interest rate cut decision on Tuesday, May 20 which brought the official cash rate from 4.10 per cent to 3.85 per cent. The Big Four banks — Commonwealth Bank, NAB, ANZ, and Westpac — revealed within minutes of each other they would pass on the rate cut in full. However, three are waiting 10 days until May 30 before that mortgage relief hits accounts. Westpac is the only one who will pass on the cut a week after the other three on June 6. Why are they waiting? The Big Four hold about $1.13 trillion in household debt, according to Finder. With a 0.25 per cent rate cut, the banking quartet pulls in roughly $7.6 million per day. That's $76 million they will earn over those 10 days of waiting. 'Of course, the banks aren't setting rates to be generous. They're responding to their own funding costs,' Finder home loan expert Richard Whitten said. 'That is, their costs for borrowing money to fund customers' loans and other business.' 'And how much profit they think they can get on top of that. The cost and profit calculations of each institution are going to look a little different.' Everyone will have different circumstances when it comes to their mortgage. If you had a $600,000 loan with 25 years remaining, May's rate cut would see you save $91 per month. While the cost-of-living crisis has been brutal in some households, others aren't leaping at the chance to reduce their loan repayments. That's because you could end up saving a lot more by keeping your repayments the same. 'With interest rates dropping, it's a great opportunity to get ahead without stretching the household budget — especially if repayments were already comfortably manageable," Nexus Loans director Jessie Boyce told Yahoo Finance. She gave the example of someone with an $800,000 loan with an interest rate of 6 per cent and a 30 year loan term. If they dropped their repayments following the rate cut, they would save about $130 per month. That works out to be $46,800 over the lifetime of the loan, provided that nothing else changed. But if they kept paying the higher repayment amount, they could shave nearly two years off their loan and save more than $70,000 in while retrieving data Sign in to access your portfolio Error while retrieving data
News.com.au
23-05-2025
- Business
- News.com.au
Melb family reveal energy efficient renovation ahead of auction timed for May rate cut
Yesterday's interest rate cut is just what Albion's Emily and Dean have been waiting for. The pair have spent the past few years renovating and extending their family home at 33 Adelaide St, boosting its energy efficiency along the way as they sought to minimise bills. But with the itch to find another project growing, the electrician and former interior designer turned analyst have listed their home for auction on May 31 in the hopes a rate cut will kick the market fully into gear and give them the best odds of selling well. With the family yet to buy their next home, yesterday's 0.25 percentage point reduction to the nation's cash rate by the Reserve Bank was likely to add some heat to the property market to help their $1m-$1.25m home sale plans — but not so much that they would be left behind as they looked for their next home. Reduced mortgage costs are a win in the short term and should allow them to take a family holiday, but the bigger plan is to upsize their life off the back of the rate cuts — and to better accommodate their growing children, currently aged 1 and 8. 'I think it's a good time to sell, and I think it's a good time to buy as there's some positivity,' Dean said. 'And it means you can be more comfortable spending a little more as everyone is getting more confident. So everything seems to be trending in the right direction for buying a home. 'Rate cuts are always good as they give you more options.' Emily added that their home renovations, which expanded their original 1960s weatherboard to more than twice its original size and created a four-bedroom floorplan, had helped them cope with mortgage payments as energy efficient inclusions zapped their bills. Ray White's Marcus Fregonese is handling the family's sale and said he was already seeing signs of buyers 'pricing in' future rate cuts. While first-home buyers and young couples would be the first to act, especially in the $600,000-$900,000 price range, Mr Fregonese added that renovated family homes at the top end of the suburb's property market were also likely to see rising interest. Bill saving features, such as better energy performance have also proven a winner with buyers lately, making the extra insulation and almost-all-electric fit out installed at No. 33 even more appealing. 'And I'm sure buyers will this week be having questions with their brokers about whether they have any more borrowing capacity and if they can bid a little more, especially knowing there's a probability of extra rate cuts on the horizon,' he said.
