ANZ passes on full 25 bps rate cut to borrowers

ANZ will pass on the full RBA cash rate cut to borrowers, the bank has announced as part of its monthly interest rate review.

The bank will lower interest rates for variable rate mortgages and small business lending by 0.25 percentage points per annum effective June 12, 2012.

ANZ’s new standard variable mortgage rate will be 6.80% pa. New small business rates are also effective from June 15.

The 25-basis-point decrease will save customers about $13.50 per week for the average home loan of $280,000, while small businesses will save $6.25 per week for the average business loan of $130,000.

ANZ chief executive Australia Philip Chronican says: "Funding costs remain elevated as a result ofthe deteriorating economic situation in Europe and strong competition for deposits.

“We are, however, pleased to be in a position to reduce rates by 0.25% this month.

“Although there was strong economic growth data this week, we know that several major states and many of our customers are not directly benefiting from the strength of theresources sector.

“The bottom line is that while deposit customers are receiving very competitive depositrates, many of our borrowing customers are under pressure from a range of other costs.We felt that reducing interest rates by 0.25%pa for home borrowers and for smallbusiness was the right decision in these circumstances,' Chronican says.

“This decision recognises that, although we need to be realistic about funding costs and the challenges the global economic situation is presenting, ANZ also needs to absorb itsshare of the burden. Hopefully this decision will help relieve some of the pressures thatwe know home owners and small businesses are facing at present."