Banks get the ball rolling on interest rates

Two financial institutions have got the ball rolling by announcing plans to cut the interest rates attached to certain loan packages.

Bosses at the Bank of Queensland (BoQ) have confirmed that the organisation will trim its rates by 20 points as of October 19th.

This is five points short of the Reserve Bank of Australia's recommended 0.25 per cent cut, but BoQ chief executive Stuart Grimshaw said the cost of funding was still high.

"We are also conscious of pressure facing all of our customers, including those with home loans and those with deposits," he remarked.

Meanwhile ING Direct has revealed that it will pass the entire 25-point reduction on to its mortgage customers from October 12th.

The government will be hoping that this has set the scene for other banks and lenders to start lowering their rates in line with the RBA's recent readjustment.

There are growing concerns that the nation's "big four" banks – ANZ, National Australia Bank, Westpac and Commonwealth Bank – may withhold some or all of the rate cut.

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