Historically low – interest rate cut enjoyed by all
The Reserve Bank of Australia (RBA) cut interest rates at the May meeting, in a move that surprised and delighted the industry, mortgage holders and potential buyers with all the major banks already announcing they’ll pass on the full cut!
It came as a big, beautiful surprise at May’s interest rate meeting, with the RBA deciding to reduce the rate by 0.25%, which has taken the official cash rate down to a historical low of 2.75%.
There was talk of a possible May rate cut earlier this year from our experts at Choice Home Loans, but the talk from industry experts over the last few months had suggested there would be no cut this year.
However, with mining boom coming off its highs, the unemployment rate lifting ever so slightly and the new housing construction figures being lower than needed to meet supply and demand, the RBA’s decision to cut the rate is timely and justified.
Within one hour of the announcement, NAB made the commendable move to pass on the full 0.25% cut to their standard variable rate, while all the majors soon followed suit but it was ANZ that upped the ante and passed on 0.27%.
As a guide, a $350,000 home loan (over 30 years) would now have a discounted variable rate home loan in the range of 5.35-5.65% -- these are unheard of rates for our market, bearing in mind that just over a year ago, we were at 6.5%.
For those who are enjoying a variable interest rate of 5.5% versus the 6.5% of 12 months ago, that’s a saving of $2,700 per year, which can make a huge difference to the household budget!
If you feel like it’s time for a mortgage review or you want to explore your interest rate options and look at locking in your rates, contact our team of professionals at Choice Home Loans, firstname.lastname@example.org or call 1300 2 CHOICE