Xmas rate cut confirmed

The Reserve Bank has cut interest rates by 0.25 percentage points to 4.25 per cent. It’s the sixth official rate cut this year and will flow through to variable home loan rates in coming weeks.

The standard variable rates of the major home lenders will fall from 6.32 per cent to around 6.07 per cent.

The 0.25 percentage-point cut will reduce minimum repayments on the average $150,000 loan by $23 a month.

This bring total cuts during 2001 to 2 full percentage points, taking almost $200 a month off repayments on the average loan.

A borrower in their first year on the average loan who kept repayments at the minimum level of a year ago, before this year’s cuts, could save up to $48,000 in interest over the course of their loan and cut their 25-year loan term by up to 7.5 years.