RBA August 2016 Interest Rate Decision

[Caput Lupinum]

Probably cut given the inflation stats this week.

I can tell you now I won't get a 0.25% reduction in my mortgage rate; the returns are diminishing with each RBA cut.

I think most banks passed on the full cut last time.

I think NAB didn't pass on the full cut?

This is going to become an issue though, the further the RBA cuts to zero as it's going to be harder for the banks to turn a profit and the costs of their short-term overseas borrowing isn't getting any cheaper. At the moment, the banks are hoping that they can still stimulate the housing market by passing on the cut but it wouldn't surprise me if they all didn't pass on the full cut next time.

Some banks are likely to only pass on part of the rate cut, especially as most had already trimmed rates in May. Commonwealth Bank confirmed this expectation, announcing it would pass on 13 basis points of the 0.25% cut. The bank was the first of the majors to announce. NAB became the second major to move, passing on a 0.10% cut. ANZ followed with a 12 basis point cut followed by Westpac with 14 basis points. Bank Australia was the first lender to announce that it would pass on the full 25 basis point cut.

https://www.finder.com.au/home-loan-interest-rate-cuts-rba-august-2016

 

[Caput Lupinum]

Probably cut given the inflation stats this week.


I think most banks passed on the full cut last time.

I think NAB didn't pass on the full cut?

This is going to become an issue though, the further the RBA cuts to zero as it's going to be harder for the banks to turn a profit and the costs of their short-term overseas borrowing isn't getting any cheaper. At the moment, the banks are hoping that they can still stimulate the housing market by passing on the cut but it wouldn't surprise me if they all didn't pass on the full cut next time.

Some banks are likely to only pass on part of the rate cut, especially as most had already trimmed rates in May. Commonwealth Bank confirmed this expectation, announcing it would pass on 13 basis points of the 0.25% cut. The bank was the first of the majors to announce. NAB became the second major to move, passing on a 0.10% cut. ANZ followed with a 12 basis point cut followed by Westpac with 14 basis points. Bank Australia was the first lender to announce that it would pass on the full 25 basis point cut.

https://www.finder.com.au/home-loan-interest-rate-cuts-rba-august-2016