RBA cuts rates to 3.75%
INDUSTRY groups have welcomed a 50 basis point cut to the cash rate to 3.75% - but the big four banks have yet to announce whether they will pass on the cut to ratepayers.
The Reserve Bank of Australia cut the official cash rate on Tuesday to a warm reception from the Housing Industry Association, National Farmers Federation and the Real Estate Institute of Australia (REIA) among other business groups.
Homeowners with a $300,000 variable rate mortgage could now save up to $100 a month on loan repayments.
While ANZ said it would review its current rates on Friday, May 11, the Commonwealth Bank, Westpac and the National Australia Bank remained tight-lipped.
"It is now on the big lenders, in particular, to restore faith with the Australian public, pass on the rate cut in full and give our economy the shot in the arm it so desperately needs," REIA chief executive Pamela Bennett said today.
Treasurer Wayne Swan said the rate cut was what "households and small business have been hanging out for".
"Homeowners are now paying $300 a year less than when the Liberals left office - that's 300 basis points lower than when the Liberals left office," he said.
Mr Swan said that the big four banks now had the capacity to pass through the full rate cut and that Australian homeowners would be expecting the banks to do so."
The banks are very profitable, the banks have the capacity to pass it through, given the fact that they are very profitable," he said.
Mr Swan said that if Australians thought they were not getting a good deal from their current bank "they should walk down the road and get a better deal".
Official Interest Rate since 1990