Rates Cut BUT will Banks Follow?

The Reserve Bank has followed through on the predictions of many forecasters dropping the cash rate by 25 basis points to a record low of 2 per cent.

The cut is good news for Aussie businesses, particularly those in the export market and impacted by the flux of the Aussie dollar.

Funds are at their cheapest in years, also good for those wishing to invest or expand an existing business, and homeowners with an existing variable rate mortgage, provided the banks pass on the cuts.

For the first time on record we ‘should’ see discount variable home loans drop to below 4 per cent. At the time of writing only one major bank, ANZ, had announced its intention to pass on the full cut. Here’s where the big four currently stand:

ANZ – variable rate will drop by 0.25 per cent on Friday
CBA – passing on 0.20 per cent from 13th May
NAB – yet to announce
WESTPAC – yet to announce

In making its announcement CBA also indicated it would increase the rates paid on 8-month term deposits by 0.55 per cent to 3.05 per cent. The rationalisation goes ‘some way’ to softening the blow to individuals and retirees relying on bank account savings, those staring down the barrel of lower returns.

No matter what stage of life or situation you are in, there’s always a way to make the current low interest rate environment work for you. 

Whether it is reviewing your existing borrowings, finding a better home loan or finance deal, investigating your options around investment or improving your retirement nest egg, our diversified team of finance specialists and Financial Planners can help.

Simply call us on 07 3899 2866 for a no-obligation finance review and we’ll help you on your way to a better financial future.

The next RBA board meeting will be held on Tuesday 2 June, 2015.