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Macquarie Bank and ING have become the two latest banks to announce that they will be passing on the RBA’s 25 basis point rate reduction to mortgage holders.
On Tuesday afternoon (4 June), the Reserve Bank announced that it was dropping the official cash rate for the first time in almost three years in order to “support employment growth and provide greater confidence that inflation will be consistent with [its] medium-term target”.
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Several lenders have now announced rate reductions across standard variable rates (SVRs) on their mortgages.
Commonwealth Bank and National Australia Bank both committed to reducing their SVRs by 25 basis points, while ANZ and Westpac have said they would reduce rates – but not by the full 0.25 of a percentage point (despite calls to do so by both the RBA governor and Treasurer Josh Frydenberg).
On Wednesday (5 June), Macquarie Bank and ING became the lastest two banks to pass on the 25 basis point cut.
From Friday, 21 June, Macquarie said it would drop the rate for owner-occupiers with a loan-to-value ratio (LVR) of less than 70 per cent to “Macquarie’s lowest ever” rate of 3.44 per cent.
Ben Perham, Macquarie’s head of personal banking, commented: “We carefully consider a range of factors when reviewing our rates, and we’re pleased to be passing on the full cut in the official cash rate through to our customers. This means we are now offering Macquarie’s lowest ever home loan rate of 3.44 per cent.”
ING has also announced that, effective from Tuesday (25 June), it will decrease all ING variable rate home loans for both new and existing customers by 25 basis points.
The new variable rate for borrowers with a 20 per cent deposit applying for a Mortgage Simplifier owner-occupied principal & interest (OO P&I) loan will be 3.38 per cent (assuming they’re borrowing between $150,000 and $1 million) while those borrowing over $1 million will see rates drop to 3.34 per cent.
The new variable rate for people applying for an Orange Advantage OO P&I will be 3.43 per cent (or 3.39 per cent for those borrowing more than $1 million).
Customer-owned banks have also said they would be passing on the full rate. Newcastle Permanent will drop rates by 25 basis points across owner-occupier, investment and business loan products from Monday, 17 June, while Greater Bank said it would reduce variable interest rates from Tuesday, 11 June, across a number of lending products for owner-occupiers, investment and business loans.
However, this follows on from a rate increase last month, when variable rates rose by 0.10 percentage point to “balance the needs of all our customers, both depositors and borrowers”.
BOQ, Virgin Money and Suncorp rate decisions
Meanwhile, BOQ has said that all but one of its variable rate loans will drop by 25 basis points.
Effective from 25 June 2019, all BOQ SVRs will drop by 0.25 per cent with the exception of the Clear Path OO P&I home loans, which will drop by 15 basis points.
Virgin Money has also announced that it will be cutting interest rates across all variable home loans for existing owner occupiers and investors, but by 22 basis points (bps). These changes will take effect on Tuesday, 25 June 2019.
Virgin Money’s general manager, lending, cards & deposits, Johnny Lockwood, commented: “We want our existing home lending customers to see the benefit of the reduced cost of funds quickly, and hope this will go some way towards easing the financial pressure of owning a home and, in some cases, create opportunities for our customers to own their homes sooner.
“We’ve carefully considered a range of significant factors in making this decision, including our customers’ expectations, the funding and regulatory environments, our operating costs and the global economic outlook.”
Suncorp Bank has followed Westpac’s lead and announced that it would reduce all variable home loan interest rates by 0.20 percentage point, effective 21 June, but will drop business loan rates by the full amount.
Speaking of the decision, Suncorp CEO, banking and wealth, David Carter said: “In the last few months, we have made significant investments in our lending processes and customer experience to make buying a home easier and more affordable for our customers.
“But we also recognise there are just as many, if not more, Australians who rely on the income of their savings to support their living expenses, particularly retirees, and falling rates is going to impact them.
“This has been a significant consideration in our decision today, and why we can continue to provide competitive rates for our deposit customers.”
Noting that the Small Business Essential Loan will drop by 0.25 percentage point per annum, he added: “Supporting small businesses across the country is one of the most important things we do because when local businesses succeed, local communities thrive.”
It is expected that more lenders will announce rate cuts in the coming days.
[Related: Treasurer ‘deeply disappointed’ at ANZ and Westpac]
