At the time of writing, cuts of 25bps had been announced by Resimac, State Custodians and Athena Home Loans. Reduce Home Loans cut its rates by 22bps, taking its lowest advertised rate to 2.89% and putting the lender in the sub 3% category with Greater Bank, HomeStar Finance and BOQ.
Unlike last month’s cut, all the majors responded to the RBA’s announcement before the day’s end.
As with last month, ANZ was the first to react, announcing a full 25bps decrease across all variable interest rates for Australian home and residential investment loans.
In June, ANZ elected to pass through just 18bps of the RBA’s 25bps cut, defying Treasurer Josh Frydenberg’s public demand for a full transference of the reduction.
CBA was next to go public, opting for a 0.19% reduction across both its owner occupied and investor P&I standard variable rate home loans.
The interest only home loans, both owner occupied and investment, received the full 25bps cut.
Last month, CBA passed through the 0.25% cut in full.
The bank also announced a special five-month term deposit rate for savers, introduced at 2.20% per year, which is a 0.20% increase.
“With official interest rate settings already at record lows, we are focused on balancing the benefits and the costs of further interest rate reductions between our 1.6 million home loan and over 6 million savings customers,” said Angus Sullivan, group executive of retail banking services.
“It is not possible to pass on the full rate reduction to over $160 billion of our deposits, including deposits where interest rates are at or already near zero,” he added.
In June, NAB also passed through the full 25bps. However, this month they elected to reduce variable home loan interest rates by 19bps, but also provided more commentary along with the decision than the other majors.
“Decisions like these are difficult and reflect the current unique circumstances, with home loan rates at record lows at the same time as deposit and savings rates also being at record lows,” said chief customer officer of consumer banking, Mike Baird.
“The difference between what we charge and how much it costs us to fund a mortgage remains under pressure and while the circumstances of each RBA cash rate decision will vary and has some influence on the cost of borrowing money, it is not the only funding cost driver for NAB.”
“Getting the balance right is an ongoing challenge for banks and, with 9 million customers, making the right decisions for our customers matters for the Australian economy,” he explained.
Westpac rounded out the responses yesterday evening, announcing a reduction of 20bps for variable rates including owner occupier paying P&I, investment p&I, and owner occupier for interest only customers.
The rate was reduced by 0.30% for residential investment property loans for customers for customers with interest only repayments.
In June, Westpac reduced rates for owner occupiers paying P&I by just 0.20%, and rates for investor customers with interest only payments by 0.35%
