Rates Hit Record New Low

Posted on August 13th, 2013 · Posted in News

Four major banks will cut variable interest rates following the RBA decision to slash rates by 0.25% to a record low of 2.5%.

Westpac has announced it will cut their standard variable interest rate by 0.28% taking it to 5.98% following the RBA decision to cut rates to their lowest level on record.  NAB, CBA, Bank of Queensland and St George will also cut 0.25% from their variable interest rates following the decision.  The cut will deliver a $45.00 saving on the monthly repayment of the average $300,000 home loan.

It is the eighth rate reduction in this cycle, which began in November 2011, and will provide a major boost for the housing sector and manufacturing as it will push the Australian dollar lower, analysts said. The cut was widely tipped by the majority of economists and comes after low June quarter inflation figures which were followed with comments from Reserve Bank governor Glenn Stevens last week.  Mr Stevens said subdued business confidence was a concern and needed to improve in order to help re-balance Australia’s economy as the mining investment boom winds down.

Lower mortgage rates are likely to provide further motivation for buyers to become active, however with values rising it is going to be more difficult for prospective owners, particularly those without equity behind them, to come up with a deposit.

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