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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.

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.

“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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