Australian mortgage holders tipped to save in just three days after RBA cut
Australia's fifth biggest bank, Macquarie Bank, will pass on the May interest rate to its customers a week earlier than its competitors, citing cost of living pressures.
Macquarie has become the first major lender to cut variable interest rates just days after the Reserve Bank of Australia officially announced a rate reduction.
Variable mortgage rate customers will get the full 25 basis point rate cut passed on by the 23rd of May.
Macquarie Bank head of personal banking Ben Perham said it was important to pass on rate relief quickly during the current cost of living climate.
'We know homeowners across Australia are watching rate movements closely and that every dollar counts,' Mr Perham said.
'That's why we're reducing the time it takes for this rate cut to be effective from 10 days to three so our customers can feel the benefit of lower rates, and more money in their pockets at the end of each month, sooner.'
From May 23 home loan rates will start at 5.64 per cent and Macquarie will automatically drop if paying the minimum and also have a direct debit set up.
The changes come just days after the Reserve Bank of Australia slashed the official cash rate from 4.10 to 3.85 per cent in a widely predicted move.
Meeting for the second time under its new dual-board structure, the RBA cut the national cash rate by 25 basis points, but surprised everyone by saying they open to a super-sized 50 basis point rate cut.
'There was an argument and we did debate it (a 50 basis point cut) but it wasn't the strongest argument in the room,' RBA governor Michele Bullock said.
She stressed 'inflation hurts everyone', particularly those on lower incomes and renters.
Responding to a question from NewsWire on whether households could expect further relief, she acknowledged Australians had gone through a 'really rough few years', typied by sharp rises in everyday prices.
'I would say that bringing inflation down is the best thing we can do to help them, while keeping employment strong,' she said.
'At the moment we are on track to deliver that. I know you're doing it tough, but conditions are improving.'
All four of the major banks have announced they will also move on interest rates but it will take a week longer.
NAB confirmed it would decrease its standard variable home loan interest rate by 0.25 per cent, effective from Friday, May 30, with the 10-day delay in line with previous changes to interest rates in the wake of a cash rate change.
ANZ was quick to follow, also dropping its variable rate by 0.25 per cent, effective on May 30.
The Commonwealth Bank of Australia has moved in line with the other majors and will also drop variable interest rates on home loans by 0.25 per cent.
Westpac told customers it too would pass on the rate cut in full – to mortgage holders and savers, albeit a touch slower.
It was the only one of the major banks to make an announcement on savings rates.
From June 3, the bank will decrease its variable interest rates by 0.25 per cent for new and existing customers.
Speaking about the change, Westpac acting chief executive consumer, Carolyn McCann said it will give welcome relief to mortgage holders facing cost of living pressures.
'Our customers have shown remarkable resilience when it comes to managing their finances through a challenging economic period,' she said.
'However, we recognise things are still tough and every dollar counts in the family budget.'
From May 30, variable rates on Westpac Life accounts will decrease by 0.25 per cent, while new customers applying online for a Westpac eSaver account will also cop a 0.25 per cent interest rate cut.
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