The Commonwealth Bank of Australia has cut its standard variable home loan rate by 58 basis points, just shy of the official 75 basis points cut off the official rate by the Reserve Bank of Australia. CBA's rate was cut on November 10 to 7.74 per cent, from 8.32 per cent, while its economiser base variable rate fell to 7.23 per cent, from 7.81 per cent.
The RBA decided to cut official rates by 75 basis points on 4 November, a bigger cut than the predicted 50 basis points, and there is some anger amongst finance insiders as well as home owners that none of the banks passed on the full cut to borrowers.
CBA's head of retail banking Ross McEwan tried to justify the move, saying the bank could not pass on the full 75-basis point reduction to home borrowers because funding costs had "increased in recent weeks".
The other major banks have also cut variable home loan rates. There have also been cuts to fixed rate home loans as they become increasingly unpopular, with borrowers favouring variable rates due to the falling interest rates.
Further rate cuts are predicted when the RBA meet again in December.
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