It is the first change in interest rates since May last year, when rates were cut 25 basis points to 2 per cent.
If this additional 25 basis point cut was fully passed on to home loans by the banks,
this would equate to a $43-a-month saving on a typical 25-year $300,000 mortgage.
“Funding costs for high-quality borrowers remain very low and, globally, monetary policy remains remarkably accommodative”.
“The board took careful note of developments in the housing market, where indications are that the effects of supervisory measures are strengthening lending standards and that price pressures have tended to abate,” it said. “At present, the potential risks of lower interest rates in this area are less than they were a year ago.”
As a result, the board suggested that the “prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting”.
It has also caused the Australian dollar to tumble 1 per cent to below 76 cents against the US dollar in response to the cut.
Now would be a good time to get in touch with you bank or broker for new loans or refinance.
Jessica O’Malley is the Licensee for
South West Property Settlements
your conveyancing professional
PO BOX 1313 BUSSELTON WA 6280
ph: (08) 6188 1280 | m: 0402 585 726
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