Two of the Big Four banks have revealed they’re passing on the RBA’s August interest rate decision. (Source: AAP) <\/p>\n
Commonwealth Bank (CBA)<\/a> and ANZ<\/a> will be the first of the Big Four banks<\/a> to pass on the Reserve Bank of Australia’s (RBA) decision<\/a> to cut interest rates<\/a>. The cash rate was lowered from 3.85 per cent to 3.60 per cent following the central bank’s two-day meeting.<\/p>\n CBA<\/a> and ANZ revealed it would give customers on variable rates a 0.25 per cent reduction in their interest repayments<\/a>, which will kick in on August 22. Competitors NAB<\/a> and Westpac<\/a> will wait until the following week to pass on the reduction to their borrowers, on August 25 and 26, respectively.<\/p>\n Finder’s head of consumer research, Graham Cooke<\/a>, told Yahoo Finance that with such large borrowing portfolios, the banks delaying even a single day could help them claw back millions of dollars.<\/p>\n The Big Four collectively make $7.6 million every day in interest payments, according to Finder analysis.<\/p>\n “It’s basically just under $2 million each per day that they’re making every time they delay a cut,” he said.<\/p>\n “If there’s three or four days between one bank and the other, that’s $6-8 million in potential profit that they could be making.”<\/p>\n Do you have a story? Email stew.perrie@yahooinc.com<\/p>\n “I think it shows cost-of-living pressure is still pretty high, and there’s so much hyper focus on what banks are charging… they couldn’t be seen as keeping any back for themselves.”<\/p>\n Competition in the banking sector has heated up after the RBA’s rate cutting cycle began in February \u2014 with some making more cut-throat calls in the hope of attracting new customers.<\/p>\n Australia’s fifth largest lender Macquarie Bank<\/a> will cut faster than all the Big Four.<\/p>\n Customers on a variable rate will enjoy a 0.25 per cent reduction in their interest repayments<\/a> from August 15.<\/p>\n This will bring the bank’s new best variable rate to 5.44 per cent.<\/p>\n Macquarie isn’t the fastest, though.<\/p>\n Smaller lender Athena Home Loans boasted how they will reduce rates “faster than a seagull on a chippy” \u2014 applying the reduction from today.<\/p>\n “No waiting. No begging. No ‘we\u2019ll think about it’. Just instant action – the Athena way. Because an RBA cut should mean money back in your pocket immediately,” Athena Home Loans said.<\/p>\n Unloan and Bank Australia were the other lenders passing on the rate cut immediately.<\/p>\n Story Continues <\/p>\n Athena Home Loans: 0.25 per cent cut from August 12<\/p>\n Bank Australia: 0.25 per cent cut from August 12<\/p>\n Unloan: 0.25 per cent cut from August 12<\/p>\n Macquarie Bank: 0.25 per cent cut from August 15<\/p>\n Commonwealth Bank<\/a>: 0.25 per cent cut from August 22<\/p>\n ANZ<\/a>: 0.25 per cent cut from August 22<\/p>\n NAB<\/a>: 0.25 per cent cut from August 25<\/p>\n RACQ Bank: 0.25 per cent cut from August 26<\/p>\n Westpac<\/a>: 0.25 per cent cut from August 26<\/p>\n St George: 0.25 per cent cut from August 26<\/p>\n Bank of Melbourne: 0.25 per cent cut from August 26<\/p>\n BankSA: 0.25 per cent cut from August 26<\/p>\n Abal Banking: 0.25 per cent cut from August 26<\/p>\n Angus Sullivan, CBA\u2019s Retail Group Executive, said the third cut of the year will give borrowers some “breathing room back in their budgets<\/a>“.<\/p>\n \u201cWe can see people are responding to lower interest rates in different ways – some are covering everyday costs a little more comfortably, others are getting ahead on their home loans,” he said.<\/p>\n With the February and May cuts, a borrower with a loan of $500,000 will save $240 a month, while those with a $1,000,000 loan would save $481.<\/p>\n Carolyn McCann, Westpac chief executive – consumer, said along with the previous reductions this year, customers could be saving an extra $266 per month or $3,192 per year based on a $500,000 home loan with principal and interest repayments.<\/p>\n \u201cWe\u2019re seeing customers use the extra breathing room in a variety of ways \u2013 from paying down their loans faster to building up savings buffers or covering everyday expenses,\u201d McCann said.<\/p>\n If you bank with CBA, NAB or ANZ you will need to contact the lender directly for the reduction to be applied to your mortgage repayment.<\/p>\n Unlike the other Big Four banks, Westpac customers may have their mortgage repayments automatically reduced.<\/p>\n “Westpac customers paying principal and interest will be notified directly about what this will mean for their rayments and how they can make changes, which includes via the app, the website or by contacting the bank,” the bank said.<\/p>\n In a move that may frustrate customers, Westpac noted it would decrease interest rates for deposit savers faster than dishing out relief.<\/p>\n Westpac Life total variable rate with bonus interest will decrease by 0.25 per cent to 4.25 per cent effective August 22<\/p>\n Westpac eSaver total variable rate with a five-month introductory rate will decrease by 0.25 per cent to 4.25 per cent for new customers applying online, effective August 22.<\/p>\n None of the other Big Four banks have revealed whether savings rates will be affected, but CBA’s savings rate is “under review”, according to Canstar’s director of data and insights, Sally Tindall.<\/p>\n She said RBA interest rate cuts are usually a “double-edged sword” because they result in savings rates going down.<\/p>\n \u201cMillions of Australians rely on the interest they earn from their savings. It\u2019s important for banks to be upfront on what\u2019s happening with these rates, even if the news isn\u2019t what their customers want to hear,” she said.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n