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Banks cut variable rates

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Banks cut variable rates

James Mitchell 2 minute read

Two mortgage lenders have announced changes to their variable home loan rates following the Reserve Bank’s decision to cut the cash rate to a new record low of 1.75 per cent.

NAB was the first to move, announcing it would pass on the full 25 basis points rate cut to variable loans for owner-occupiers, investors and businesses borrowers.

NAB group executive of personal banking Gavin Slater said the bank considers a range of factors when making the decision to change interest rates.

“The circumstances of each decision will always vary and we must take into account factors such as competition, regulatory capital requirements and funding costs,” Mr Slater said.

“Today’s decision balances the needs of our home loan customers with our shareholders.”

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The new NAB rates will be effective from 16 May 2016.

Bank of Queensland (BOQ) also announced it would pass on the full 25 basis points rate cut to its variable home loan customers.

BOQ CEO and managing director Jon Sutton said the decision to cut rates came after careful consideration of a range of factors, including BOQ’s position in a highly competitive market.

“While funding markets remain volatile, we have made the decision to lower our rates to ensure we maintain the right balance between growth, risks and margins over the longer term while also considering the needs of our customers,” Mr Sutton said.

Variable home loans for owner-occupier and investor customers will be cut by 25 basis points.

The new variable rates will be effective from 18 May 2016.

[Related: Westpac sees $17.5bn of mortgages reclassified]

Banks cut variable rates
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James Mitchell

James Mitchell

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.

He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.

James holds a BA (Hons) in English Literature and an MA in Journalism.

 

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