Interest Rates Tumble Again
December 2nd saw the Reserve Bank of Australia cut interest rates by another 1%. To the Australian consumer it means a reduction in their variable loan repayments but the full i
nterest rate cut will only be passed on by a few lenders.
In a swift decision, Commonwealth Bank and NAB decided to pass on the full 1% rate reduction while other lenders took their time in assessing whether they should follow or pass on part of the rate cut. As the days went on we heard the news trickle from each lender and below is a summary of how much each lender will reduce their interest rates this time round.
Commonwealth Bank, NAB, ING Direct, Heritage – 1%
RAMS, Suncorp – 0.90%
St George – 0.85%
ANZ – 0.83%
Westpac – 0.80%
Of all the lenders mentioned above, this leaves Commonwealth Bank, ING, NAB and Heritage Building Society with the most competitive home and investment loan products on the market and I expect them to be very busy in the next couple of months.
While it might be the case now that these lenders are offering lower interest rates, I expect the other lenders will reduce their rates or come out with special offers that will help them regain market share in the home loan sector.
