Rate cuts to 3.25 per cent
In an announcement coinciding with prime minister Kevin Rudd’s multibillion dollar rescue package, the RBA pledged to cut the base rate by another full percentage point, taking it to 3.25 per cent and its lowest point in 45 years.
However, banks and other lenders have been slower to react to the decision than they were in December, when the institutions scrambled to confirm the introduction of new low-interest home loans in line with the 100 basis point cut.
While Westpac and ANZ were happy to commit to the cut, Treasurer Wayne Swan pushed other lenders to follow their lead and introduce new home loans “in a timely way”.
For those on tracker home loans or first-home buyers looking to enter the market, the cut is likely to be welcomed readily, with tracker customers seeing the target rate fall 50 per cent in the last year alone.