Major banks cut home loan rates
Mortgage customers have been on tenterhooks since the Reserve Bank of Australia (RBA) announced a cut to the national cash rate earlier this week.
They have been eagerly waiting to see if the country's major banks and lenders would follow the organisation's advice and trim their home loan interest rates by 25 points.
Bosses at National Australia Bank (NAB) have now confirmed that the firm will lower its standard variable home loan rate by 0.2 per cent and it will also reduce its business loan rates by the same amount.
Although the bank has not passed the reduction on in its entirety, customers with a $300,000 mortgage will still save around $50 a month.
Group executive of personal banking Lisa Gray said decisions relating to interest rates were never taken lightly and she offered some insight as to why the company has withheld 0.05 per cent of the RBA's cut.
"The increased competition for deposits is pushing up costs, making it more expensive to fund our lending," she remarked.
It emerged yesterday (October 4th) that the Bank of Queensland had reduced its rates by 20 points, while ING Direct announced it was introducing the full 25-point cut.
Another of the country's "big four" lenders – the Commonwealth Bank – has also made its move, as leaders at the firm confirmed it will drop its home loan interest rates by 0.2 per cent from October 12th.
Again, the institution highlighted the high cost of deposits as a major factor behind its decision not to pass on the full reduction.
"This increase, benefitting depositors, has resulted from increased competition for deposits as Australian banks reduce their reliance on wholesale funding," a statement from the bank noted.
Westpac has also trimmed its headline standard variable mortgage rate – but only by 18 points.
Inevitably, the pressure will now mount on ANZ to slash its own interest rates.
Mortgage customers will obviously be hopeful that it follows the lead of ING Direct, rather than NAB, Westpac and the Commonwealth Bank.
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