The RBA decided to reduce official interest rates today, and mortgage holders the country over are waiting for word on how their banks and lenders will respond. Thankfully, it looks like they won’t have to wait for too long.
Among the major banks, Westpac was the first to make a move, announcing it will be cutting 0.25% across its range of variable rate home loans just a few short minutes after the RBA’s decision.
The news comes as a surprise to many, especially considering Westpac passed on only 0.15% the last time the RBA cut rates in October 2019. But Chief Executive, David Lindberg said the big bank was swayed by the risks currently plaguing the economy.
“We recognise that COVID-19 will have a direct impact on our nation’s economy and we want to provide additional support to our small business and home loan customers at this unprecedented time,” he said.
CommBank, NAB and ANZ follow suit
News of the other major banks’ decisions came not too long after, with Commonwealth Bank and NAB taking a page from Westpac’s book and cutting rates by 0.25% for both owner occupiers and investors.
“Some choose to pay down their loans faster while others are choosing to reduce monthly repayments to help with the household budget. Our role is to offer our customers choice,” said NAB Chief Customer Officer Consumer Banking, Mike Baird.
ANZ was the last of the big four to fall in line, announcing it will be slashing 0.35% off variable rates for investors making interest only repayments, and 0.25% off variable rates for all other home, investment and line of credit loans.
All four major banks’ standard variable rate change decisions for eligible owner occupiers are detailed below:
|Commonwealth Bank||0.25%||24 March|
Online lenders quick to move
While the big banks were quick to announce cuts, they face stiff competition from online lenders, who have been scrambling over one another in a race to reduce rates. Considering many already offered rates below the 3.00% mark, their home loans suites are set to become much more attractive.
Athena, Homestar and 86 400 all sprang into action within minutes of the RBA’s decision, announcing they will be slashing variable home loan rates by the full 0.25%. They were followed by Reduce Home Loans and loans.com.au, who also opted to pass on the full cut.
“After launching our home loan products late last year, this has been our first opportunity to address a rate cut. As an agile bank, we can make the obvious and simple decisions quicker to put money back in our customers’ pockets,” said 86 400 CEO, Robert Bell.
Among the top value home loans in our database, online lenders are well represented. Currently, Athena Home loans offers rates starting at 2.59% p.a. (2.55% p.a. comparison rate*), Homestar offers 2.44% p.a. (2.47% p.a. comparison rate*), and Reduce Home Loans offers 2.44% p.a. (comparison rate 2.47% p.a.*).
As decisions from the rest of the market continue to trickle through, make sure you browse our list of home loan lender decisions, which we’ll be updating periodically.
Home loan comparisons on Mozo - last updated January 16, 2021
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