Cash rate dropped to 0.75 per cent: Has your bank passed the October rate cut on?

Has your bank passed the rate cut on? Source: Getty

The Reserve Bank of Australia has slashed rates again to a new record low of 0.75 per cent, after dropping rates first in June and then again in July to the then-record low of 1 per cent.

Now, those with variable home loans could see some more relief to their mortgage rates, but only if the banks choose to pass the rate on.

• Also read: Should I choose a variable or fixed interest rate home loan?

• Also read: This is what your variable home loan looks like now

• Also read: Shock rate decision: Reserve Bank of Australia issues ‘death knell’ for country’s savers

Has your bank passed it on?

Has your bank passed the rate cut on? Source: Yahoo Finance

CBA first to cut: 0.13% to 0.25%

CBA’S new Standard Variable Rates

• Owner Occupied Principal and Interest Standard Variable Rate home loans reduced by 0.13% per annum (p.a) to 4.80% p.a.

• Investor Principal and Interest Standard Variable Rate home loans reduced by 0.13% p.a. to 5.38% p.a.

• Owner Occupied Interest Only Standard Variable Rate home loans reduced by 0.13% p.a. to 5.29% p.a.

• Investor Interest Only Standard Variable Rate home loans reduced by 0.25% p.a. to 5.64% p.a.

CBA’s new Fixed Rates

• 2 and 3 Year Owner Occupied Principal and Interest Fixed Rates in the Wealth Package reduced to 2.99% p.a. available from Thursday.

Following the RBA’s cash rate decision we have announced the reduction of the Standard Variable Rate for our home loan customers by between 0.13% p.a. and 0.25% p.a. and limited the base rate reduction on our NetBank Saver product by 0.05% p.a.

— CBA Newsroom (@CBAnewsroom) October 1, 2019

“As the Reserve Bank cash rate has reached record lows, we face a difficult balancing act between the multiple, valid interests of our stakeholders,” CBA group executive retail banking services Angus Sullivan said in a statement.

“Particularly given it is currently not feasible to pass on the full rate reduction to more than $160 billion of our deposits which are at, or near, zero rates.

“In balancing these interests, we have carefully considered how to best meet the needs of over 6 million savings customers – who may find it challenging to make ends meet with record low savings interest rates – with the needs of our 1.6 million home loan customers, who want to pay less on their mortgages; and the needs of our shareholders, many of whom are retirees who rely on our dividend.”

Take a look at the variable home loan rates after the July cut

Variable home loan interest rates after the July RBA decision. Source: Yahoo Finance

ANZ was the only big four bank to pass on the entire cut, Westpac passed on a 0.20 per cent cut, while CBA and NAB each passed on a 0.19 per cent cut.

My bank hasn’t passed on the interest rate cut. What can I do?

The RBA has been slashing rates, but the big four banks haven’t passed on the entire cut to consumers.

So, if you’re a customer of the big banks, it might be time to consider switching banks to get a better rate. InfoChoice currently lists 22 three-year fixed rate products from independent lenders with rates under 3 per cent per annum.

If you’d prefer to stay with your current bank, here’s how to talk your way to cheaper home loan too.

And here’s a check-list of things you should have done after the RBA started cutting rates.

Yahoo Finance will keep you updated once we know which banks have passed on the rate cuts.

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