The RBA has made the historic decision to cut the cash rate by 0.15 per cent today, slashing official rates to 0.10 per cent.
The RBA has also announced a range of other measures including buying $100 billion in government bonds and reducing the cost of funding.
RateCity.com.au analysis shows the average mortgage holder with a $400,000 loan could see their minimum monthly mortgage repayments fall by $33 per month if their lender passes it on in full.
Impact of today’s 0.15 per cent cut if passed on in full
|Loan size||Monthly savings||Annual savings|
Source: RateCity.com.au. Assumes an owner occupier paying principal and interest over 30 years. This scenario is based on the current average rate of 3.19 per cent.
Already, Athena Home Loans has announced they are passing on the full cut to both new and existing variable customers.
- For a live list of who has cut, go to our RBA rate tracker.
Meanwhile, Reduce Home Loans has claimed the new lowest rate of 1.77 per cent for owner occupiers with a 60 per cent loan-to-value ratio, but only for new customers.
Sally Tindall, research director at RateCity.com.au, said: “As our economy starts to re-open, along with our borders, this move from the RBA is intended to help people get jobs, assist businesses and provide people in financial distress with some rate relief.”
“Today’s announcement puts immense pressure on the banks to pass it on to their existing variable home loan customers,” she said.
“Around half a million mortgages were deferred at some point during COVID, and those families are unlikely to be in a position to refinance. These are the people who need a rate cut.
“A rate cut could save the average home loan customer $33 per month, which may seem like small change to some people, but for families struggling to make ends meet it could be the lifeline they need.
“At this stage the big banks appear to be playing a game of chicken with no announcements as to whether they will pass it on to their customers.
“Call your bank, find out what they intend to do. If they don’t pass on a full cut, shop around in what remains an extremely competitive market,” she said.
Impact to savings rates
RateCity analysis shows the average ongoing savings rate is now 0.52 per cent. This could fall to below 0.40 per cent on the back of today’s rate cut.
“The outlook for savers has just turned from gloomy to bleak, with another RBA cut today and no prospect of a rate rise for at least the next three years,” she said.
“Already a handful of banks are offering no interest on some savings accounts. While the big banks will desperately want to avoid cutting their base rates down to 0 per cent, it can’t be ruled out,” she said.
|Lender||Cuts||New lowest variable||Effective date|
|Athena Home Loans||0.15%||2.19%||November 3|
|Mortgage House||0.15% - new customers only||1.94%||November 15|
|Homestar Finance||0.15% - new customers only||1.79%||November 3|
|Reduce Home Loans||0.12% to 0.20% - new customers only||1.77%||November 3|