RBA cuts rates to new historic low

Tuesday 3 March 2020

  • RBA cuts rates to new historic low
  • First lender to pass on rate cut in full is …
  • Savers need to act to stay ahead of inflation

The Reserve Bank of Australia has cut the official overnight cash rate (OCR) in Australia by 0.25 percentage points to a new historic low of 0.50 percentage points.

“Not all banks and lenders will pass on this rate cut in full to all their home loan customers,” said Vadim Taube, chief executive of InfoChoice, one of Australia’s leading financial comparison websites.

“Rates are getting so low that banks are weighing up the impact of more rate cuts on savers and borrowers.”

Variable HL rates:

BEFORE this cut, the lowest variable rate (OO, P&I) is from Reduce Home Loans’ Rate Slasher home loan at 2.69 per cent per annum (comparison rate 2.70 per cent per annum).

“The leading variable home loan rates for owner occupiers will fall to less than 2.5% pa while, unfortunately some borrowers are still on rates around 4%,” said Vadim Taube.

Fixed HL rates:

BEFORE this cut, the lowest fixed rate home loan rate on InfoChoice is from Bank Australia’s Clean Energy Home Loan for LVRs under 70% with a current 3-year rate of 2.44% pa (comparison rate 3.43% pa).

Investor HL rates:

BEFORE this cut, the lowest rate for investors was from UBank’s UHomeLoan Fixed Rate with a fixed rate of 2.84% pa (comparison rate 3.59% pa) for three years.

The lowest home loan rates will now fall

The RBA governor, Dr Philip Lowe reportedly met with the treasurer and the prime minister over the weekend to discuss policy options to respond to the growing threat of the coronavirus.

First lender to pass on full 0.25% cut to borrowers is Athena

Non-bank Athena Home Loans, a specialist in refinancer mortgages has already announced it will pass on the full 0.25% rate cut to its retail home loan borrowers.

Athena says “as quickly as we can” they will cut their home loan rates for new and existing customers. The new Athena rates are as follows:

Athena Home Loans new rates:

OO P&I – 2.59% (2.55% CR)

OO IO – 3.09% (2.74% CR)

INV P&I – 2.99% (2.95% CR)

INV IO – 3.09% (2.99% CR)

Check out Athena Home Loans rates and fees information at InfoChoice.

Savings rates:

“We expect banks to cut savings rates in the coming weeks so that makes comparing rates and account rules even more important,” said Vadim Taube.

“Banks will shield savers as best they can from the full weight of this cut because term deposit and at-call savings account rates from many banks and credit unions are already under the rate of inflation

“Savers can still get rates above inflation, which is currently 1.8% pa, by shopping around.”

“Judo Bank has market leading term deposit rates across the range of terms from under 12 moths to five years.”

“ME, UBank and some of the neobanks have easy rules for savers and high rates.”

InfoChoice’s RBA rates analysis, update and outlook page.

Compare 1800 home loans at InfoChoice now.

Direct to Commonwealth Bank home loan interest rates and fees information at InfoChoice.

Direct to Westpac Bank home loan interest rates and fees information at InfoChoice.

Direct to ANZ Bank home loan interest rates and fees information at InfoChoice.

Direct to NAB home loan interest rates and fees information at InfoChoice.

Go straight to the latest rates information from 145 individual banks and other institutions here.

For more information on home loan rates, data and commentary, please contact:

Jason Bryce, Media Manager on 0428 777 727 [email protected]

For more comments, please contact: Vadim Taube, Chief Executive on 0403 580 794

InfoChoice compares financial products from 145 banks, credit unions, authorised deposit-taking institutions, non-bank lenders and other financial product providers in Australia. InfoChoice does not compare every product in the market. Some institutions may have a commercial partnership with InfoChoice. Rates are provided by partners and taken from financial institutions websites. We believe all information to be accurate on the date published. InfoChoice strives to update and keep information as accurate as possible.

Home Loan Comparison Rate is based on a secured loan of $150,000 over the term of 25 years.

WARNING: These comparison rates apply only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and costs savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan

InfoChoice is a leading Australian comparison website for retail banking and personal finance products. We’ve been helping Aussies find great offers on credit cards, home loans, savings accounts, term deposits, personal loans and car loans for over 25 years. Our mission is to help consumers make an informed purchasing by bringing together the most comprehensive list of financial products on the market today.

At InfoChoice, we strive to be:

•           Comprehensive. We compare more than 3500 individual products from 145 providers within Australia to offer you the best value.

•           Informative. We know how important it is for you to crunch the numbers before buying. Our calculators help you understand the cost of different products over the long term and show you the potential savings.

Vadim Taube, CEO of InfoChoice.com.au:

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