Today’s rate cut to deliver $50/month

Households with an average mortgage of around $300,000 will get rate cuts worth about $52 per month if banks pass on 0.25 per cent of any RBA rate cuts. The Reserve Bank is expected to cut rates by 0.5 per cent with banks likely to pass on about half of that to borrowers. For a borrower with a $400,000 mortgage a 0.25 per cent cut will be worth about $69. If the banks were to pass on the full half a per cent cut, the average mortgagee owing $300,000 would benefit by more than $100 per month. ANZ chief economist Saul Eslake said if the Reserve Bank cut rates by just 0.25 per cent, borrowers would be unlikely to see any rate cuts passed through to them. Treasurer Wayne Swan said competition between lenders could be expected to bring down rates further when markets had stabilised.

Source: Herald Sun