This afternoon the Reserve Bank cut the official interest rate for the first time in nearly seven years, reducing it by 0.25 of a percentage point, to 7%. How will this affect home loan rates currently available to consumers?
Rate Detective expects all major banks to cut their rates by the same margin as the RBA, and indeed ANZ Bank, Commonwealth Bank, NAB and Westpac have already made announcements to that effect. Rate Detective believes any changes made by the big banks in relation to the official interest rate decrease will be put into effect within the end of the month.
David Kaplan, Rate Detective Co-Founder comments, "This decrease might even open the door for some competition between the big banks. From now on I would be watching all lenders closely - particularly the majors."
The big banks aren't the only ones to jump to action. RAMS have also already cut their fixed rates and introduced a new product offering an interest rate of 8.54 per cent. It guarantees a rate of 1 per cent below the standard variable rate for two years. Currently it's the most competitive rate on the market. See a live comparison of home loan rates.
To summarise, the effect of today's RBA decision David Kaplan states, "The reduction in the official cash rate will put pressure on all lending institutions to cut their rates and bring relief to consumers."
"Some of the major banks have already responded well."
"There has been suggestion of further rate cuts in the coming months. If this does in fact occur, then the reductions will be very small and gradual."
"There is no doubt this current rate cut will make it that much easier for first home buyers and others to afford the Australian Dream."