Are the Big Four banks about to make historic interest rate cuts?

Tuesday 08 January 2013

Article by Mozo

Home loan holders may be about to receive a very unexpected and belated Christmas present from Australia's Big Four banks.

The Big Four may not have passed on a full rate cut to their customers in over two years but with a significant easing of pressure on their bottom line, thanks to a reduced cost in funding from global sources, it seems the Big Four may be about to make history and slash interest rates, out of cycle with the Reserve Bank, says JP Morgan analyst Scott Haslem.

Banking sources last night revealed that there have been internal discussions by the major lenders, who are considering self initiated rate cuts. Westpac are believed to even go as far as slashing their rates as much as 6 basis points as early as February. However, none of the banks are willing to comment for fear of facing price-fixing accusations, reports The Australian. 

The possible rate cuts come as economists predict Australia will experience a boom year in 2013. News of the U.S. avoiding the fiscal cliff was already having a positive effect on the economy, according to AMP chief economist Shane Oliver.

With recent suggestions that the best place for Australians to improve their financial situation is to start by reducing the cost of their home loan, mortgage holders are encouraged to complete a home loan health check and utilise the best home loans available on the market

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