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Majors pass on 0.25%pa interest rate cut

Moments after the Reserve Bank announced it would cut 25 basis points from the official cash rate, two of Australia’s majors jumped into action – passing the full rate cut on to their borrowers.

Westpac was the first of the majors to move, officially cutting its standard variable home loan rate by 25 basis points at 2:47pm.

Continued economic weakness in Europe continues to impact negatively on Australian business and consumer confidence. A reduction in interest rates will provide a timely boost to sentiment and generate a positive flow-on effect for the broader Australian economy.

The rate cut means repayments on the average $250,000 household mortgage will be reduced by approximately $41 per month.

The Commonwealth Bank of Australia was the second major to move, reducing its standard variable rate. But While CBA and Westpac were quick to move, ANZ and NAB have held firm.

The industry is now waiting with baited breath to see if the two banks follow in the footsteps of their competitors.

I believe the  ANZ and NAB will follow suit sooner rather than later.