Rate cut leaves the nation $4.3 billion better off
Yesterday’s announcement to cut the base rate of interest by a further percentage point has saved the nation a collective $4.3 billion in home loan repayments.
The Daily Telegraph reports that the historic move will save someone on a $400,000 variable home loan $249 a month.
And with all of the major lenders passing on the rate cut in full with the launch of new low-interest home loans, it is likely that the nation will be able to trim a sizeable chunk off the collective $584 billion owed on mortgages.
UNSW finance professor Fariborz Moshirian held praise for the Reserve Bank and the Rudd government for taking decisive action in a bid to shelter Australia from the global financial storm.
“The government is being proactive. We’ve learned from history that governments should have been more pro-active at the beginning of downturns,” he said.
The 100 basis point cut brings the base rate to 3.25 per cent, with the Reserve Bank picking up this year as it left off in December, when it also knocked a full percentage point off.