Banks must pass on the RBA rates cuts Good New for Home Buyers

Reserve Bank Interest Rates Drop to 4.25 per cent – 2 December 2008

The current RBA interest rate has dropped to just 4.25 per cent, after the Reserve Bank board announced another aggressive rate cut of 100 basis points at its December board meeting today.

Today’s cut takes the current RBA rate to its lowest level since December 2001, as the Reserve Bank seeks to stimulate economic growth and counter falling inflation.

The cut to the current RBA interest rate follows earlier cuts of 75 basis points in November and 100 basis points in October, taking total rate cuts over the last three months to a whopping 275 basis points.

Some pundits are predicting rates still have further to fall, with suggestions the RBA interest rate could fall to as little as 2.75 per cent by Easter 2009. This would be the lowest the RBA interest rate has been since 1960!

December’s rate cut is good news, but whether homeowners will see the benefit of reductions in their mortgage repayments in time for Christmas depends on whether their lender is naughty or nice in passing on the RBA’s rate cut.
Below are the ones first to pass on the rates cuts:

CBA & NAB before 7.74% now 6.74%
Aussie before 7.65% now 6.65%
ING Direct before 7.19% now 6.19%

Stay tuned for more