Commonwealth Bank and NAB pass on a bit of the official RBA cut

Commonwealth Bank and NAB pass on a bit of the official RBA cut
Commonwealth Bank and NAB pass on a bit of the official RBA cut

The Commonwealth Bank has announced the lowering its standard variable mortgage rate by only 13 basis points, the first lender to respond to the August rate cut by the RBA.

It is around half of today's Reserve Bank's 25-basis-point official rate cut. The CBA's owner occupier rate will hit record low 5.22%.

The National Australia Bank is passing on even less, cutting its standard variable mortgage and business loan rates by just 10 basis points.

Both NAB and CBA customers will also have to wait to get the benefit of the rate reduction until August 19.

Third big bank to make the cut was the ANZ whose home loan will come down by 0.12% pa to historic low of 5.25% pa for owner occupiers.

St George reduced its standard variable rate by 0.14% to 5.30% from 23 August.

Meanwhile Bank Australia will be passing on the full 0.25% cut on its standard variable home loan rate down from 4.99% to 4.74%.

The effective date for these changes will be Friday 5 August. 

Westpac was the last of the big banks to come out, offering a 0.14% cut, the biggest of the big four to move. Westpac dropped their SVR to 5.29% from 23 August.

"We’ve reduced our standard variable interest rate by 10bps to 5.25% pa effective 19 August," the NAB advised.

NAB Chief Operating Officer, Antony Cahill, said NAB had carefully considered the needs of customers and shareholders and the current economic and regulatory environment in making this decision.

“We have had to strike the right balance between providing customers with competitive mortgage rates and continuing to generate attractive returns for our 584,000 shareholders, while recognising that NAB’s funding costs have been steadily increasing due to a range of factors, including the need to strengthen our balance sheet,” Mr Cahill said.

As a result of today’s announcement, NAB customers with a standard variable rate home loan will save $18 each month on their home loan principal and interest repayments, or $216 every year (based on a $300,000 loan over a 30-year term).

At 5.25% p.a., NAB’s new Standard Variable Rate will be the lowest it has been for more than 40 years. In November 2010, the average standard variable interest rate across Australian banks was 7.80% per annum*, compared with NAB’s new Standard Variable Rate of 5.25% p.a. and under 4.00% p.a. for some fixed rate products.

As at March this year, NAB home loan accounts are, on average, almost 15 months ahead on their repayments, and Mr Cahill said NAB has a range of home loan products available to suit customers’ needs.

“We understand some customers want to have certainty about their monthly repayments and that’s why we offer a number of highly competitive fixed-rate terms which allow customers to lock in interest rates for all or part of their home loan,” Mr Cahill said.

NAB is currently offering a suite of “4-under-4” fixed rate home loan offers. For owner-occupier principal and interest borrowers, interest rates ranging from 3.75% p.a. to 3.99% p.a. are now available across 1, 2, 3 and 4 year terms. Competitive offers are also available to those borrowing for investment purposes.

Also, from Monday 8 August, NAB will increase its interest rate on 8-month Term Deposits by 0.85% p.a., introducing a Blackboard Special of 2.90% p.a. (interest paid at maturity).



Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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