All four major banks have announced an interest rate cut, providing welcome relief for borrowers following the Reserve Bank of Australia cutting the cash rate.
The central bank on Tuesday cut the cash rate by 25 basis points to 3.6 per cent, but flagged the end to its easing cycle is getting closer.
Macquarie Bank was first out of the gate, confirming it will pass on the full cut to customers from Friday.
Australia’s other major banks have also confirmed they will pass on the RBA’s full 0.25 percentage point cut to their standard variable home loan rates.
ANZ and CommBank will both implement the reduction from August 22, while NAB customers will see the change take effect on August 25.
Westpac will be the last of the Big Four to introduce the rate cut on August 26.
The Reserve Bank decided to drop the cash rate by 25 basis points on Tuesday
Macquarie Bank was the first to confirm it would pass on the full rate cut to borrowers
All nine board members voted in favour of a cut and there was no discussion of a jumbo 50 basis point cut, Ms Bullock said.
The RBA’s decision will save borrowers with a $600,000 mortgage almost $90 a month in repayments and a cumulative $272 per month since cuts began in February.
The move brings the cash rate to its lowest level since May 2023, with the average variable mortgage rate expected to fall to 5.5 per cent.
But for many borrowers, the financial boost was behind estimates.
Most economists had expected the RBA to deliver rate relief in its July meeting.
In a shock 6-3 decision, the board kept rates on hold, citing a need to wait for more inflation data to ensure price growth was coming down sustainably to target.
The local share market lifted modestly and the Aussie dollar fell following the decision, while money markets were pricing in two more cuts by March.
Vanguard senior economist Grant Feng predicted one more cut by the end of 2025, as growth showed signs of recovery and the unemployment rate stabilising.
ANZ and Commonwealth Bank will reduce their customer rates on August 22
NAB customers will see the rate cut take effect on August 25
Westpac will be the last of big four banks to move, passing on the cut on August 26
Treasurer Jim Chalmers said the decision was ‘very welcome relief for millions of Australians’.
‘The three interest rate cuts we’ve seen this year would not have been possible without our collective efforts to get inflation down,’ he said.
In quarterly forecasts produced by RBA staff and released alongside the cash rate decision, productivity growth was revised down by 0.3 per cent over the medium term.
That would flow through to lower GDP growth, lower living standards and make it harder to get inflation under control.
