Eighteen lenders have so far announced they will cut variable rates by up to 0.25 per cent, with all four big banks committing to passing the cut on in full.
As a result of today’s announcement, RateCity.com.au report that all four big banks will offer variable rates under 3 per cent; the lowest being from NAB at 2.84 per cent.
|New Standard Variable Rate||New Discounted Variable Rate||New lowest variable rate|
Note: Rates are based on an owner-occupier paying principal and interest repayments on $400,000.
Big bank rate cuts – effective dates:
- CBA rates effective 24 March 2020
- Westpac rates effective 17 March 2020
- NAB rates effective 13 March 2020
- ANZ rates effective 13 March 2020
How much will the average homeowner save?
Today’s rate cut will save the average mortgage holder $56 per month or $675 a year. This is based on an owner occupier paying principal and interest on a $400,000, 30-year mortgage.
Potential savings on a 0.25 per cent cut
|Loan size||Mthly savings||Annual savings|
Note: the above calculations are based on a person with a $400K, 30-year loan on RateCity’s average variable rate of 3.73 per cent.
Comments from RateCity.com.au research director Sally Tindall:
“The majority of variable rate homeowners are set to save over $50 a month as a result of the cut to the cash rate,” she said.
“This is money some families can put towards their bills but Australians with a bit of cash to spare may want to spend this cut in their local community.
“Any cut to the cash rate is always a double-edge sword as savers brace for another round of deposit rate cuts.
“While plenty of savers are facing the prospect of earning next to no interest on the back of this rate cut, it is still worth shopping around for a decent rate.
“When the dust settles, we expect the highest savings rate to sit at 2 per cent, which is at least a fraction higher than the current inflation rate,” she said.
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