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Two more banks respond to RBA rates decision

by Staff reporter7 minute read

Heritage Bank and Bank of Melbourne have followed suit by reducing rates for their variable home loan products.

Heritage announced it will pass on the full 0.25 per cent rate cut delivered by the Reserve Bank across its variable home and business banking loans.

Bank of Melbourne reduced its standard variable home loan rate from 5.90 per cent per annum to 5.65 per cent.

On Tuesday, the Reserve Bank reduced the official cash rate to a new record-low of 2.25 per cent after its being left on hold at 2.5 per cent since August 2013.

CBA was the first of the majors to cut rates, announcing that it will reduce its variable rate to 5.65 per cent.

However, Westpac responded by reducing its variable rate by 28 basis points – three points more than the official rate cut.

Bank of Queensland, ME Bank, ING Direct, Maitland Mutual Building Society and Newcastle Permanent were the first of the non-major lenders to pass on the full rate cut to customers.

[Related: Online lender undercuts the big four]