After the Reserve Bank of Australia decided to cut the key rate for the third time this year, Treasurer Josh Frydenberg urged banks and lenders to fully pass on the reduction.
As part of efforts to stimulate the strengthening of the economy, the RBA decided to reduce the official cash rate by 25 basis points, bringing it back to a historic low of 0.75%.
"The government expects the banks to fully apply this reduction of 25 basis points.What this means for an Australian family with a mortgage of $ 400,000, it is $ 720 less a year of interest payments, "Frydenberg said.
Read also: Investors do not benefit from rate cuts?
Phantom Treasurer Jim Chalmers agreed with Frydenberg 's sentiments, adding that this recent reduction underscored the urgent need for governments to step up their efforts to stimulate the government. economy.
"After three rate cuts since the May election, the lowest interest rates ever recorded equate to a quarter of what they were at the bottom of the global financial crisis. The government leaves the task to the Reserve Bank, "he said. said.
Two of Australia's largest banks have already reacted to the central bank's rate cut. Despite pressure for full cuts, the Commonwealth Bank and National Australia Bank decided to make partial changes to their standard variable rates instead.
The ABC announced that it would lower rates by 13 basis points for homeowners and investors contracting principal and interest rate loans. The total reduction of 25 basis points will only be applied to real estate investors receiving interest-bearing housing loans only. The amendments will come into effect on October 22.
Read also: The RBA's allusions to other rate cuts
For its part, NAB will also lower the rates applicable to homeowners and investors. However, only a 15 basis point reduction will be applied to its variable rate home loan products. On the other hand, investors with only interest will benefit from a larger reduction of 0.3%.
Angus Sullivan, leader of the ABC group, said that it was not possible for the bank to pass through the full reduction because of its profit margins.
"While the Reserve Bank's liquidity rate has reached a record low, we are facing a difficult balance between the multiple and valuable interests of our stakeholders," he said.
Mike Baird, NAB's Customer Relationship Manager for Personal Banking, also raised concerns about deposit rates.
"While these changes further support our 930,000 home loan customers, we are aware of the increasing impact of interest rate reductions on our three million savings and investment customers, and will continue to offer competitive interest rates on savings and term deposits, "he says.
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