The Reserve Bank of Australia has today cut interest rates to a new historic low of 1.75%, following the previously low rate of 2% where it has remained at since May 2015.
The National Australia Bank has been the first bank to announce it will pass on the 25 basis point reduction in full to its variable rate home loan customers. The RBA’s decision is expected to add pressure to Australian banks to also cut their lending rates by the full 0.25 percentage points.
RBA governor Glenn Stevens said of the cut, “In reaching today’s decision, the board took careful note of developments in the housing market, where indications are that the effects of supervisory measures are strengthening lending standards and that price pressures have tended to abate.
At present, the potential risks of lower interest rates in this area are less than they were a year ago.”
According to Canstar, the cut could save homeowners around $72 per month based on a $500 000 mortgage. This is great news for both mortgage holders and prospective homebuyers and experts predict future rate cuts may be expected over the next three months.
For more information on how this rate cut can help you find your perfect home, please contact our office on 9544 0000