Lenders quick to act on rate cut

Only minutes after the RBA announced its drop to the official cash rate, lenders have fallen into line behind the Central Bank.

The CBA, Westpac, NAB and ANZ all passed on the 25 basis point cut by taking off 0.25% pa off their variable loan products since the 2pm announcement was made.

The CEO of the MFAA, Phil Naylor, stated the move by the central bank would herald good news to borrowers.

Speaking of the decision Naylor said: “This is very encouraging news for borrowers.”

“A slump in consumer confidence, with a decrease in construction and overall retail spending shows that the RBA’s strategy to slow the economy has worked. The Reserve has now obviously seen it appropriate to slightly loosen its grip.”

Further Naylor stated that any moves by lenders to pass the cut onto consumers would fuel competition and work to benefit the industry.

“The competitive forces in the lending market will now determine how quickly borrowers receive the benefit of this announcement from individual lenders” he said.

“A competitive market is important to ensure there is pressure on lenders to keep rates low.”

Wizard Home Loans was the first lender to cut its variable rate, announcing the decision on Sunday.