On Tuesday, 7 May the RBA surprised many by cutting the official cash rate to just 2.75% pa. It’s the lowest the cash rate has been since 1960, surpassing even the low rates introduced following the GFC.
Perhaps also surprisingly, the major banks acted quickly, passing on the full rate cut to home loan borrowers. NAB was first to move dropping its variable home loan rate by the full 0.25%. Commonwealth Bank and Westpac quickly followed, also passing on the full rate cut. A couple of days later, ANZ outdid them by cutting its rate by 0.27%.
This shows competition is again returning to the home lending market following years of tightening in the wake of the GFC. And the banks may cut mortgage rates even further over the coming months, regardless of what happens with the official cash rate.
Last Tuesday, the RBA kept rates on hold for June at 2.75%. This was in line with most economists’ expectations. And we can expect this rate to remain until at least later in the year.
For businesses, the lowest rates in decades now on offer provide an ideal opportunity to finance new equipment or other capital expenditure. Contact one of our Business Finance Specialists to find out how your business could benefit.
And for those of us with a mortgage, falling rates and rising competition among home lenders means now’s a great time to speak with your Westlawn Mortgage Broker about refinancing for a better deal, or for buying your next property.
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