News

Banks pass on rate cut

The Commonwealth Bank (CBA), NAB, ANZ and Westpac have announced that they will pass on the recent Reserve Bank of Australia (RBA) rate cuts to consumers.

CBA will cut its standard variable mortgage rate to its lowest percentage since April 2009 by 0.25% to 5.65% and its five year fixed rate mortgage by 0.30% to 4.69%. Westpac’s floating interest rate is being cut by 0.28% to 5.7% per annum, exceeding the RBA cut. Westpac said the reduction will save homeowners $52 a month, or $624 a year, in repayments on an average $300,000 mortgage.

What do these interest rate cuts mean for the property market?

  • Those of you looking for a loan can now secure one for a cheaper rate. A lower interest rate means loan repayments are less for home buyers, keeping more money in your pocket.
  • Experts are anticipating the interest rate cuts will likely spur investors looking to secure a property that will deliver them a smaller gap between rental yield and mortgage repayments.
  • There is also good news for sellers with the expected increased interest in the market from buyers likely to drive prices up, improving your capital gains.

In further good news for the property market, the RBA is not ruling out further rate cuts in the near future.