ANZ, NAB, CBA and Westpac have all dropped their home loan interest rates following the Reserve Bank’s official interest rate cut. The Reserve Bank of Australia cut the cash rate by 25 points to 1.75% on Tuesday, prompting the big banks to action.
National Australia Bank was the first to cut its standard variable home loan by the full cut to bring the rate to 5.35%. NAB was the only bank of the big four to forecast the move by the RBA and was evidently prepared.
Westpac also passed on the full cut to reduce its variable rate to 5.43% before the Commonwealth Bank of Australia followed suit to cut its rate to 5.35%.
ANZ also announced a reduction in its variable home loan rate, however it cited a 19 basis point decrease instead of the 25 point diminution utilised by the other three banks. ANZ blamed rising costs for its smaller rate reduction.
Analysts say that motivation for the RBA’s rate cut to a record low is the underlying inflation and the rising Australian dollar. According to the economist who first predicted the RBA rate cut, rates will be dropped again soon.