Moments after the Reserve Bank announced it would cut 25 basis points from the official cash rate, Australia’s lenders started to move.
ING DIRECT was the first lender to move on rates, passing on the full 25 basis point cut and taking the interest rate on its popular Mortgage Simplifier product to 5.72 per cent.
This is the second time ING DIRECT has been the first lender to pass on the full rate cut.
After the last RBA rate cut in October, the bank was one of just a handful of lenders to pass on the full 25 basis point cut – a fact that has not gone unnoticed by brokers.
Minutes after ING DIRECT announced it would pass on the full rate cut to its borrowers, praise started flooding in for the lender from the third party distribution channel.
“Good on you, ING DIRECT,” one comment on theadviser.com.au read.
Craig, another commentator, also applauded the lender’s decision: “That is great news, ING DIRECT. The majors want all the business but will not pass on the full rate cuts. What will they do this time? Thanks ING DIRECT for giving us more options and good products to offer our clients,” Craig said.
But not every lender opted to pass on the entire cut, with Bank of Queensland (BOQ) deciding to cut just 20 basis points from its variable interest rate, taking it to 6.51 per cent.
Bank of Queensland’s chief executive Stuart Grimshaw said the lender was conscious of the pressures facing all customers at this time of year, including those with home loans and those with deposits, and believed the 20 point cut would strike a fair balance between the two.
“The 20 basis points rate cut brings BOQ’s standard variable rate home loan to 6.51 per cent per annum, effective from Friday 21 December 2012,” he said.