The Commonwealth Bank, Australia’s biggest mortgage lender, is passing on the full official interest rate cut to its 1.6 million home owner customers.
The bank’s standard variable rate for mortgages has been cut by 0.25% of one percentage point to 5.65%.
The RBA yesterday changed interest rates for the first time in 18 months, reducing the official cash rate by 0.25 of one percentage point to a record low of 2.25%.
Westpac Bank has decided to reduce its standard variable mortgage rate by 28 basis points, to 5.7%, 3 points more than the RBA’s rate cut.
ANZ said it will decide on rates by Friday.
The Bank of Queensland, making an announcement 20 minutes after the RBA move, was the first to announce it would be passing on the interest rate cut in full.
In an indication the Commonwealth Bank believes more cuts are on the way from the RBA, Commonwealth’s 5 year fixed rate mortgage has been cut by 0.30% to 4.69% and the 3 year fixed rate mortgage reduced by 0.25% to 4.69%.
“Our fixed rates are now the lowest we have ever offered,” says Matt Comyn, Group Executive Retail Banking Services.
“Our new reduced standard variable rate of 5.65% is the lowest we have offered in five years.”
Home owners will save about $48 a month based on the average mortgage of $300,000.
Commonwealth has cut its variable rate on home loans by 2.16 percentage points since November 2011, the equivalent to a saving of $430 in monthly repayments and an annual saving of $5,160 on a home loan of $300,000.