After 13 rate hikes and more than four years, borrowers rejoiced this week when the Reserve Bank of Australia opted to lower the official cash rate to 4.10 per cent, for the first time in four years.
The move was widely anticipated, following reports showing inflation down to ‘manageable’ levels.
All four big banks responded immediately, with Westpac consumer chief executive Jason Yetton saying the decision would be welcome news for mortgage customers.
"By reducing the standard variable home loan rate by 0.25 per cent per annum, borrowers will save an extra $90 per month, or $1080 per year, based on a $500,000 home loan with principal and interest repayments”, Yetton said.
"Borrowers could use this as an opportunity to get ahead on their mortgage by putting the extra savings into their mortgage repayments, or into their offset account to help reduce the interest on their loan", he suggested.