Aussie Home Loans dropped its standard variable mortgage interest rate by 40 basis points following the announcement by the Reserve Bank of Australia (RBA) to cut official rates by 75 basis points. This latest cut comes on top of a 50 basis point reduction just before the RBA announcement, and takes Aussie's standard variable rate down to 7.65 per cent.
The mortgage broker also announced it was also reducing its basic variable rate for first homebuyers to 6.99 per cent.
Executive chairman John Symond says Aussie's 7.65 per cent rate is below that of the big four banks and will lead to increased competition.
The RBA has cut official cash rates three times in as many months, but many lenders were slow to pass on the first round of cuts to home owners.
The reductions started in September, when the RBA cut rates by a modest 0.25 per cent. When this did little to stimulate a slow economy or boost housing markets, the bank slashed on full per cent off official rates in October. In November, rates fell again, this time by 0.75 per cent, and this time many lenders were quick to pass on most of the savings. Now economists predict a large cut in December and more to come in the new year.
Aussies rate change is effective for new and existing borrowers immediately.
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