Mortgage rates cut at two biggest lenders

Mortgage rates at Australia's two biggest home loan lenders were slashed yesterday as turmoil in the global economy continues to generate considerable financial headwinds for the country.

The move by the Commonwealth Bank of Australia, which is Australia's biggest lender and Westpac to reduce their mortgage rates is being seen as a forerunner to central rate reductions from the Reserve Bank of Australia.

Between them, the institutions are responsible for 40 per cent of home loans and so the near-term rate cuts are expected to impact on thousands of Australian homeowners' finances.

However, John Buonaccorsi, of RBS Equities, told Reuters that people should not expect all mortgage rates to fall.

"The other banks might well follow but that doesn't mean they will cut their variable rate just yet. The fixed rate market is small, probably under ten per cent," he told the news provider.

Until recently, many analysts were expecting a hike in central interest rates, which would have benefited savings accounts holders, but not those with home loans, Jason Wilson, assistant professor in journalism at the University of Canberra, told ABC News.

Have a question about interest rates? Ask the money gurus at Mozo Answers.ADNFCR-1761-ID-800694434-ADNFCR