One of Australia’s banks has passed on the full rate cut, less than one hour after the Reserve Bank announced it would cut 25 basis points from the cash rate.
Earlier today, ING DIRECT announced it would cut the interest on its variable mortgages by 0.25 per cent, effective from Monday 24 December.
According to a statement from the bank, ING DIRECT considered its funding position and the RBA’s own reduction in the official cash rate to make the decision to decrease its home loan rates.
“Our funding position has eased recently allowing us to pass on 25 basis points, however, the threat of elevated funding costs has not passed completely,” CFO Glenn Baker said.
“The RBA cash rate is one element we looked at, however, our own funding position was the driver of the decision.”
ING DIRECT was one of the only lenders to pass on the full rate cut when the Reserve Bank last cut rates back in October.