The Commonwealth Bank has passed on the full Reserve Bank rate cut to home owners. CBA's variable mortgage rate falls to 5.74 per cent from February 13. The announcement came just hours after both Westpac and ANZ also cut mortgage rates by 1 per cent.
Yesterday the Reserve Bank of Australia slashed official interest rates 1 per cent as the economy continued to slow, but many financial experts and home owners were wondering if banks would pass on the rate cut in full.
Ross McEwan, head of retail banking at Commonwealth Bank said they were happy to be able to pass on the full rate cut but couldn't promise any future cuts to mortgage rates.
"As the world economic crisis continues and the current pressure remains on funding costs, any future changes in interest rates will need to reflect these higher costs of funds," said Mr McEwan.
"On this basis, we may not be able to pass on in full any future interest rate cuts."
The cash rate is now at a 40-year-low of 3.25% and comes in the same week that a report from the International Monetary Fund shows major developed countries in recession and has concluded that the world economy is at a standstill
Last week, Deputy Prime Minister Julia Gillard spoke to ABC Television following a meeting with welfare groups to discuss the impacts of the financial crisis and job losses and asked banks to be compassionate to home owners.
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