All of the big four banks have passed on the full Reserve Bank of Australia cash rate which yesterday was cut to a record low of 0.5%.
Westpac was the first to break the silence, with CBA, NAB and ANZ following suit in passing on the full cut to home loan customers.
This is largely due to pressure coming from the Australian government, and will result in thousands of borrowers saving hundreds of dollars each month.
The cash rate dropped from 0.75% to 0.5% due to a sluggish economy, worsened by bushfires and the coronavirus outbreak, according to RBA governor Phillip Lowe.
Westpac was the first out the door to hand the 0.25 per cent rate cut over to customers on Tuesday, followed closely by its competitors Commonwealth Bank, NAB and then ANZ.
The 0.25 per cent reduction in rates on means an owner-occupier with a standard variable home loan of $400,000 will save an extra $60 per month, or $720 per year, Westpac said.
Prime Minister Scott Morrison had urged the banks to “do the right thing” by consumers and pass on the expected rate cut in full as the coronavirus weighs on the economy.
“We want to provide additional support to our small business and home loan customers at this unprecedented time,” Westpac consumer CEO David Lindberg said.
Commonwealth Bank retail banking chief, Angus Sullivan, said “In responding to this latest official interest rate cut we have examined the important role we play in supporting the Australian economy and the unique set of circumstances facing the country.”
NAB was third to join the party, lowering home loan, small business and business overdraft variable rates by 25bps, effective 13 March.
ANZ announced it will decrease variable interest home loan rates in Australia by between 0.25 per cent to 0.35 per cent per annum across a range of standard variable rate Indices.
