ANZ leads CBA, Westpac & NAB with rate cut following RBA move

Commonwealth Bank says it will pass on the full Reserve Bank rate cut, while ANZ – the first of the big four to respond to the cash rate change – will pass on some of the cut.
Big four banks
Source: Vitalii Tairov (Canstar)

The Reserve Bank board decided to cut the cash rate by 0.25 percentage points to 1.25% today, marking the first change to the rate since the central bank lowered it to 1.5% in August 2016.

Commonwealth Bank will reduce its standard variable rates for owner occupiers and investors by 0.25 percentage points, while ANZ says it will cut its standard variable rates for owner occupiers and investors by 0.18 percentage points.

CBA’s standard variable rate for owner occupiers paying principal and interest will fall to 5.12% (comparison rate 5.27%). This will reduce the minimum required monthly repayment amount by $62, based on a mortgage of $400,000 paid over 30 years.

“We have carefully considered the RBA rate decision and the current funding environment, together with how we continue to meet our regulatory commitments, capital requirements, and community expectations,” the bank’s executive of retail banking, Angus Sullivan said.

As for owner occupiers paying interest only, the standard variable rate will drop to 5.67% (comparison rate 5.48%).

ANZ’s standard variable rate for owner occupiers paying principal and interest will fall from 5.36% (comparison rate 5.46%) to 5.18% (comparison rate 5.28%).

This means a borrower with an average $400,000 home loan with a 30-year term would see their monthly repayments fall by $44 to $2,192.

ANZ’s executive of retail and commercial, Mark Hand said he understands that some home loan customers would be disappointed by ANZ’s decision to not pass on the full cut.

“In making this decision, we have weighed up a number of factors, such as business performance, market conditions and the impact on our customers, including our depositors,” he said.

For owner-occupiers paying interest-only, the standard variable rate will fall to 5.73% (comparison rate 5.50%).

Westpac and National Australia Bank are yet to respond to the cash rate change, with their standard variable rates for owner occupiers paying principal and interest currently at 5.38% (comparison rate 5.53%) and 5.36% (comparison rate 5.50%).

A number of smaller lenders have announced they will pass on the full rate decrease, including Athena, Homestar and Reduce Home Loans.

Westpac told Canstar that it was reviewing its home loan rates, and comments have been sought from NAB.

Share this article