The Reserve Bank of Australia (RBA) has cut the official cash rate by 25 basis points to a new record low of 0.75%. But will the banks pass on the interest rate cut in full to you?
RBA Governor Philip Lowe said this third rate cut in five monetary policy meetings was made to support employment and income growth.
“The Board also took account of the forces leading to the trend to lower interest rates globally and the effects this trend is having on the Australian economy and inflation outcomes,” he said in a statement.
“It is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target.”
The RBA previously cut the official cash rate on July 2, just one month after making its first rate cut in almost three years (since August 2016).
Now the real question is: will you benefit?
This little infographic by the ABC makes for pretty interesting reading.
It shows just how much of the last two RBA rate cuts each of the big four banks passed on to its customers in June-July.
Indeed, not one of the big four banks passed on both rate cuts in full, with each bank passing on somewhere between 0.40–0.44% (out of 0.50%).
As such, it will be worth keeping an eye on just how much of this most recent rate cut your lender passes on, not to mention how that stacks up against the competition.
With three RBA cuts so close together, it can get a bit confusing as to just how much of these cuts your lender is passing on to you.
The good news is we’re following the market closely and can tell you which lenders pass this third rate cut on to their customers in full, and which lenders don’t.