The Reserve Bank has again slashed rates, cutting its key rate by another 100 basis points to a record low 3.25%.
Today’s cut will save a home buyer with a typical 30-year, $300,000 loan about $170 in monthly repayments if the lender passes on the full amount. Over the life of the loan, the savings will total about $61,272.
”There was a significant deterioration in world economic conditions late in 2008,” said RBA Governor Glenn Stevens in a statement accompanying the cut. ”The effects on household and business confidence of the financial turmoil following Lehmans collapse, and continuing strains on major financial institutions, saw a significant downturn in demand around the world.”
Westpac was the first among the major banks to cut its rates, passing on the full 100 basis points. Its new standard variable home loan rate will fall to 5.91%, with its business lending rate as well as some credit cards falling by the same amount. More….