What great news to hear, another rate drop!

The Reserve Bank has cut interest rates by 25 basis points just a week before Federal Treasurer Joe Hockey delivers his second budget.

RBA Governor Glenn Stevens said the rate cut would be effective from today.

“In Australia, the available information suggests improved trends in household demand over the past six months and stronger growth in employment.” Stevens statement says.  Stevens said the board also took the booming housing market into consideration in its decision.

“Low interest rates are acting to support borrowing and spending, and credit is recording moderate growth overall, with stronger lending to businesses of late. Growth in lending to the housing market has been steady over recent months.

So how does this affect your variable loan? Well best to check with your bank.  ANZ have decided to pass on the cut in full, with CBA only passing on 0.2%.  NAB & WBC are yet to make an announcement.

Figures by financial comparison website show on a $300,000 30-year home loan the average standard variable rate is 5.25 per cent and the monthly repayments are $1667.  The latest drop will see an additional $47 in customers’ hands.  Not bad!

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