Interest rates have hit a new record low – what does this mean for homeowners?
Posted on 07 June 2019
The Reserve Bank of Australia has cut interest rates to as low as 1.25%. This means a borrower with a $500,000 mortgage could save around $70 per month, as their introductory standard variable mortgage falls by 25 basis points to 3.59 per cent, taking their repayments to $2,271.
An owner-occupier paying off principal and interest will see their monthly repayments fall by $78 to $2,721, as their standard variable rate drops to 5.12 per cent.
The Reserve Bank has cut the cash rate for the first time since August 2016, with rising unemployment rates and a slowing domestic economy cited.
ANZ became the first bank to cut interest rates, 20 minutes after the RBA decision to cut the cash rate by 0.25 per cent. However, ANZ ignored Treasurer Josh Frydenberg’s plea to pass on, in full, the central bank’s 25 basis point cut, cutting its standard variable mortgage rate by a lesser 18 basis points, outraging the Liberal Party’s deputy leader.
‘I think the ANZ has let down its customers. This is deeply disappointing,’ he told reporters in Melbourne on Tuesday afternoon.
Commonwealth Bank and NAB customers will receive the full benefits of the rate cut, with Westpac trailing behind as the only major bank to not announce a rate cut by close of business.