Interest rates hit 0.75% after October RBA meeting, so has your lender passed on the full cut?
Australia has a new record low cash rate of 0.75% following the Reserve Bank of Australia’s (RBA) decision to shave 25 basis points off the official rate at its October meeting in Sydney this afternoon.
The decision, which was largely anticipated, marks a third cut in less than four months since the RBA first took action to lower rates back in June.
"The Board took the decision to lower interest rates further today to support employment and income growth and to provide greater confidence that inflation will be consistent with the medium-term target," said RBA Governor, Philip Lowe, in his post-meeting statement.
"The main domestic uncertainty continues to be the outlook for consumption, with the sustained period of only modest increases in household disposable income continuing to weigh on consumer spending."
According to Mozo Banking Expert, Peter Marshall, recent unemployment figures and the general state of the Australian economy likely forced the RBA’s hand.
“The RBA have made it pretty clear over the past few months that driving down unemployment is one of their primary goals, so the recent, albeit small, increase in unemployment and underemployment figures will have grabbed their attention,” he said.
“Those figures, combined with the fact that the economy is still showing fairly broad-based signs of weakness, will have likely weighed strongly on the RBA’s decision to intervene and and drop rates today.”
Will lenders respond with home loan rate cuts?
Now that the official cash rate has been cut again home owners around the country will be keeping a keen eye out for changes to another rate: their home loan interest rate.
While just a handful of banks and lenders passed on the full 25 basis point cut both times following the June and July RBA cuts, Marshall still expects to see quite a few lenders pass on most, if not all, of today’s cut.
“Competition is still pretty intense with lenders trying to attract customers, so I think we’ll see them respond to today’s move with some decent cuts to variable rates,” he said.
“Unfortunately for savers, I’ll be surprised if most banks don’t pass on a large portion or the entire cut to savings accounts and term deposits.”
We’ll be keeping track of all the latest variable home loan rate changes as they come in, so make sure you check in with our Naughty or Nice table below to see if your home mortgage lender has passed on the full cut.
Ready to engineer a rate cut of your own?
With home loan rates falling all around, now could be prime time to refinance your current deal to a better value offer. Get started by comparing rates as low as 3.00% and below in Mozo’s dedicated home loan comparison tables.
Read our last month Reserve Bank interest rates update
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