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ISCOVER
Jessica Darnbrough
Moments after the Reserve Bank announced it would cut 25 basis points from the official cash rate, two of Australia’s majors jumped into action – passing the full rate cut on to their borrowers.
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Westpac was the first of the majors to move, officially cutting its standard variable home loan rate by 25 basis points to 7.61 per cent per annum at 2:47pm.
“Ongoing economic weakness in Europe continues to impact negatively on Australian business and consumer confidence. A reduction in interest rates will provide a timely boost to sentiment and generate a positive flow-on effect for the broader Australian economy,” Westpac’s group executive retail and business banking Rob Coombe said.
According to Mr Coombe, the rate cut means repayments on the average $250,000 household mortgage will be reduced by approximately $41 per month.
The Commonwealth Bank of Australia was the second major to move, reducing its standard variable rate from 7.81 per cent to 7.56 per cent.
But While CBA and Westpac were quick to move, NAB has held firm.
The industry is now waiting with baited breath to see if the last major follows in the footsteps of its competitors.
Wayne Swan last week warned the banks the government expected the full benefits of a rate cut to be passed through to customers.
National Mortgage Brokers’ managing director Gerald Foley said ANZ and NAB were widely tipped to follow suit and he expects both banks to move sooner rather than later.
“It will be interesting to see if all of any cuts are passed through to mortgage holders. It would be hard for the banks to justify doing anything less,” he said.
