Westpac and CommBank first two big banks to pass on full RBA rate cut
Big bank Wesptac has become the first of the big four banks to announce it will be passing on the full 0.25% RBA rate cut on its variable rate owner occupier and investor home loans, effective from March 17 2020.
The new variable rate for owner occupiers has now dropped to 4.58% for customers making principal and interest repayments, with the new investor loan variable now sitting at 5.13%.
According to Westpac Chief Executive, David Lindberg, the decision comes in response to the recent coronavirus outbreak.
“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.
“This will give our variable home loan and small business customers more money in their back pocket through passing on the full 0.25% p.a. interest rate reduction.”
According to the bank, an owner occupier customer with a standard variable home loan of $400,000 making principal and interest repayments is set to save an extra $60 per month, or $720 per year.
Lindberg went on to say that Wesptac customers can now take advantage of some of the banks “lowest variable home loan rates in 50 years” and that the bank would continue to work on adjusting its rates in the anticipation of any future rate cuts.
“While this is the right decision, pricing changes are increasingly challenging as the cash rate heads towards zero. We will continue to review our rates on a case-by-case basis taking into account the diverse range of stakeholders and factors which influence the cost of funding,” Mr Lindberg said.
CommBank also made an announcement that it would be passing on the full cut, reducing its standard variable rates across owner occupier and investor loans by 25 basis points, effective from 24 March 2020.
For Aussie homeowners making principal and interest repayments, the rate will drop to 4.55% and 5.13% for investors.
Other lenders who have also passed on the full cut include neobank, 86 400 and online lenders, Homestar and Athena.