The Reserve Bank of Australia have cut interest rates to a record low of 0.10% – a dramatic shift from the previous 0.75% in October 2019 and 0.25% since March 2020. This is the third reduction for the year and Treasurer Josh Frydenberg said the reduction was ‘complementary’ to the economic support provided by the Morrison Government.
This is great news for many Australians that could potentially save hundreds of dollars off their mortgage repayments with Mr Frydenberg highlighting the ideology that the average Australian would have more cash in their pockets to spend in the economy rather than on their mortgages.
Multiple non-bank lenders including homeloans.com.au, Homestar and Athena Home Loans have already said they would pass on the full 0.15% variables loans whereas none of the big four banks have confirmed yet if they would pass on the cut to variable or fixed loans.
Reserve governor Philip Lowe suggested there would be no more interest cuts, and they would not go “into negative territory”, he also commented that the board was not expecting to raise rates for “at least three years”. Dr Lowe highlighted that the decisions made by the central bank “compliments the government efforts to support the Australian economy and to lower unemployment.”
This is a brief summary of the article ‘The lowest interest rates in our history’ by Sarah Ison | The West Australian | Wednesday 4th November 2020.