Official cash rate cut announced of 25 basis points

| October 2, 2012

At  the RESERVE BANK OF AUSTRALIA Board Meeting today, it was decided to lower the cash rate by 25 basis points to 3.25 per cent, effective 3 October 2012

rate cut australia

RBA governor Glenn Stevens said the outlook for global growth had softened with China’s expansion now tracking at a slower pace and continuing weakness in Europe. Treasurer Wayne Swan welcomed the RBA’s decision, saying "Australians deserve cost of living relief and today that’s what they got".

Will the banks pass on the rate cut ?

The Bank of Queensland cut its variable rate by only 20 basis points.

The Bank of Queensland was the first bank to react, cutting its standard variable rate by 20 basis points to 6.71 per cent immediately after the RBA’s announcement.

The major banks – ANZ Banking Group, Commonwealth Bank, National Australia Bank and Westpac  are still muddling on.

Statement by Glen Stevens  RBA GOVERNOR

Save Thousands of dollar’s by not changing  your Mortgage Repayments

Paying your mortgage off faster is a fantastic way to gain equity.

With a interest rate cut  you can  potentially saves tens of thousands of dollars in interest costs over the long term. As an example a 30-year, $300,000 mortgage at 6.5% will cost you $682,633 by the time you pay it off. If interest rates drop by 0.5% and you keep your repayments the same, you’ll have the loan paid off 4 years earlier at a total cost of $595,344.

Quite often the banks automatically adjust your home loan ( or mortgage repayments) to reflect the reduced rates  or rate cut , which  can take away the advantage of you paying your home loan faster, but if you instruct  the bank to not reduce the repayments then you can save thousand of dollar in the long term

Interest Rate Cuts History 2008–2012

Effective Date Change in cash rate
Percentage points
New cash rate target
Per cent
3 Oct 2012 -0.25 3.25
5 Sep 2012 0.00 3.50
8 Aug 2012 0.00 3.50
4 Jul 2012 0.00 3.50
6 Jun 2012 -0.25 3.50
2 May 2012 -0.50 3.75
4 Apr 2012 0.00 4.25
7 Mar 2012 0.00 4.25
8 Feb 2012 0.00 4.25
7 Dec 2011 -0.25 4.25
2 Nov 2011 -0.25 4.50
5 Oct 2011 0.00 4.75
7 Sep 2011 0.00 4.75
3 Aug 2011 0.00 4.75
6 Jul 2011 0.00 4.75
8 Jun 2011 0.00 4.75
4 May 2011 0.00 4.75
6 Apr 2011 0.00 4.75
2 Mar 2011 0.00 4.75
2 Feb 2011 0.00 4.75
8 Dec 2010 0.00 4.75
3 Nov 2010 +0.25 4.75
6 Oct 2010 0.00 4.50
8 Sep 2010 0.00 4.50
4 Aug 2010 0.00 4.50
7 Jul 2010 0.00 4.50
2 Jun 2010 0.00 4.50
5 May 2010 +0.25 4.50
7 Apr 2010 +0.25 4.25
3 Mar 2010 +0.25 4.00
3 Feb 2010 0.00 3.75
2 Dec 2009 +0.25

3.75

4 Nov 2009 +0.25 3.50
7 Oct 2009 +0.25 3.25
2 Sep 2009 0.00 3.00
5 Aug 2009 0.00 3.00
8 Jul 2009 0.00 3.00
3 Jun 2009 0.00 3.00
6 May 2009 0.00 3.00
8 Apr 2009 -0.25 3.00
4 Mar 2009 0.00 3.25
4 Feb 2009 -1.00 3.25
3 Dec 2008 -1.00 4.25
5 Nov 2008 -0.75 5.25
8 Oct 2008 -1.00 6.00
3 Sep 2008 -0.25 7.00
6 Aug 2008 0.00 7.25
2 Jul 2008 0.00 7.25
4 Jun 2008 0.00 7.25
7 May 2008 0.00 7.25
2 Apr 2008 0.00 7.25
5 Mar 2008 +0.25 7.25
6 Feb 2008 +0.25 7.00
 
Glenn Stevens, RBA  Governor said The outlook for growth in the world economy has softened over recent months,Growth in China has also slowed, and uncertainty about near-term prospects is greater than it was some months ago.
 
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Category: 2012, bank rates, Banks, home loans, home rates, Interest rate hike, RBA, Tips Home loans

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