Within minutes of the RBA’s cash rate cut announcement yesterday, major lenders began dropping rates.
Westpac charged ahead, dropping its standard variable mortgage rate by 28 basis points, bringing it down to 5.98%, while NAB (now 5.88%), CBA (5.90), BoQ (6.01%), BankVic (5.49%), ME Bank (5.38%) and YBR (4.74%) have all cut their variable rate loans by 25 basis points. CBA also announced a reduction to its residentially secured business loans by 25 basis points.
Westpac subsidiary brand, St George, have similarly cut their rates by 25 basis points, as have non-major lender ING Direct.
The major lender's home loan rates are now at their lowest level since October, 2009.
“After our reduction in our home loan rates in May, I’m delighted we are able to follow up with a further cut today,” says Westpac general manager, mortgage distribution, Tony MacRae. “This will take the total savings on an average Westpac home loan amount to nearly $4,400 a year since rates started coming down.”
MacRae says Westpac had seen increasing signs of buyers returning to the housing market and that the latest interest rate reduction would help support both new purchasers and existing homeowners.
“The latest consumer surveys have shown that confidence is the key to our customers’ well-being and we believe that what we have announced today will help support growth in the housing sector as well as improve the faith in Australia's economic outlook.”
MacRae adds Westpac took a number of factors into consideration when making its decision on its interest rates, including its total funding costs, particularly the price of deposits, the current state of the Australian economy and competition in the market place.
The mass downward shift falls on the path of at least one lender - Advantedge Financial Services - who opted to drop their interest rates prior to the RBA announcement.