The Reserve Bank of Australia’s (RBA) decision to lower interest rate to a historic low 1% gained an immediate response from the market, with non-major banks announcing a cut in their home-loan rates.
AMP Bank, Bendigo Bank, MyState Bank, Citibank, and P&N Bank were the latest non-majors to decrease their rates.
AMP announced a 0.20% cut across all variable rate home loans and a reduction in its two- and three-year fixed-rate home loans by up to 0.53%, starting 22 July.
“We are managing our business in a very active market, and decisions like this are considered carefully and thoroughly. We remain committed to providing competitive rates for our new and existing customers and (our) decision has been influenced by a continued elevation in costs as well as desire to balance the interest of homeowners and savers,” said AMP CEO Sally Bruce.
Bendigo Bank cut variable rates on its owner-occupied home loans by 0.20% and decreased rates across its investment loans by 0.15%, effective 29 July.
MyState Bank also announced a 0.20% cut on its variable home-loan rates for borrowers paying principal and interest and a 0.10% cut for borrowers paying interest only.
“With rates as low as this country has never seen before, decisions such as these are difficult. We believe this combination of pricing changes delivers a fair balance of outcomes for both savers and borrowers,” said MyState Bank General Manager of Banking Tony MacRae.
Citibank and P&N Bank also lowered their rates.
Citibank reduced rates on all residential variable rate home loan products by 0.18% and another 0.18% cut for lines of credit facilities. While P&N decreased its rate by up to 0.18% for new and existing home loan customers.
Around 50 lenders cut their home loan rates following the RBA’s decision, with smaller credit providers passing on the full 0.25% cut.