Bankwest is the latest bank to announce an interest rate cut, following yesterday's decision by The Reserve Bank of Australia (RBA) to cut official rates by 100 basis points. Bankwest will cut 0.85 per cent off their standard variable home loan rate. This saves the average home owner with a $250,000 mortgage around $180 per month on their mortgage repayments.
Bankwest decided not to pass on the full rate cut to customers, and their new rate will now be 6.80% effective from December 10 for new and existing customers.
So far only two lenders have passed on the cuts in full, with both Commonwealth Bank and National Australia Bank passing on a 1 per cent rate cut. A one per cent cut to home loan rates will save borrowers up to $200 per month on their mortgage repayments. Westpac announced their standard variable home loan rate will fall by 80 basis points.
Bankwest media relations manager Bridget Tombleson cited increased funding costs from external markets as the reason for the bank not passing on the full rate cut to borrowers.
However she said Bankwest’s Rate Tracker home loan product would offer a 0.91 percentage point rate cut to 5.82 per cent. The product tracks the average rate of the four big banks combined.
Yesterday's official rate cut of one per cent shocked some economists who were predicting a cut of 0.75 per cent. After four consecutive rate cuts, the RBA will be hoping to boost the economy and prevent Australia from slipping into a recession.
The string of interest rate cuts, coupled with an increase to the first-home buyer grants have spurred an renewed interest in home ownership from first home buyers, and this latest interest rate cut should mean that this trend continues.
Join the discussion on Bankwest
|