As Australia's jobs outlook deteriorates the Reserve Bank has cut interest rates to 3 per cent, giving homeowners a boost.
This official interest rate cut takes us to the lowest point since 1960 but there is no guarantee that the cut will be passed on to the homeowners by the major banks.
The first bank to reduce interest rates yesterday afternoon, was Commonwealth Bank cutting the rate on its standard variable home loans by 10 basis points to 5.64 per cent.
The National Australia Bank announced that it wouldn't be cutting its interest rates due to "higher funding costs."
If the banks were to pass on the cut in full to customers, it would reduce the monthly repayment on an average $250,000 standard variable mortgage by $38.
ANZ and Westpac have informed that their mortgage rates were currently under review. We monitor major lenders closely and will update on banks rate cuts if any as soon as they appear.
The decision by the Reserve Bank to cut mortgage rates was a positive announcement and Treasurer Wayne Swan said that he hoped that the banks would pass on the cut as soon as possible.
Glenn Stevens governor of the Reserve Bank stated that although mortgage rates were at very low levels, the board felt that there was still further scope for a modest adjustment to the cash rate. Mr. Stevens further stated that the stance of the monetary policy, together with the substantial fiscal initiatives would provide significant support to domestic demand over the period ahead.
Jobs data released on Monday has shown that the jobs market is drying up quicker than in either of the past two recessions. Another 1000 Australian jobs were lost yesterday with Caterpillar cutting 280 workers from its 700 strong Tasmanian workforce and miner lluka axing 135 positions in WA after cutting its output. Rio Tinto will cut 135 full time jobs and about 570 contractor positions.