Macquarie Bank has announced that it will reduce most of its fixed home loan interest rates by up to 0.3 per cent per annum.
The announcement follows the Reserve Bank of Australia (RBA) announcement on Tuesday that it would place the cash rate on hold at 3.6 per cent after 10 consecutive increases.
The reduced home loan interest rate is expected to provide some borrowers relief amid the current cost-of-living crisis.
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Macquarie Bank’s new rates are expected to take effect from Thursday, April 6, with the bank reducing most of its two, three, four and five-year fixed home loan interest rates for new loans by up to 0.3 per cent per annum.
New fixed rates will go down to as low as 5.29 per cent per annum for owner-occupier principle and interest three-year loan terms where the lending-to-value ratio is below 70 per cent.
Meanwhile, investment loans will drop to 5.49 per cent per annum.
The bank made the surprise announcement before any of Australia’s big four banks — Commonwealth Bank of Australia, National Australia Bank, ANZ and Westpac — indicated any changes to their rates in response to the RBA’s decision.
For 10 consecutive months, the RBA hiked the cash rate, bringing it from a pandemic-induced low of 0.1 per cent to the current level of 3.6 per cent.
Australia has also experienced weaker than expected inflation numbers for the month, which likely contributed to the rate pause decision.
The inflation rate is currently sitting at 6.8 per cent.
RBA Governor Phillip Lowe said the board’s decision “follows a cumulative increase in interest rates of 3.5 percentage points since May last year”.
“The Board recognises that monetary policy operates with a lag and that the full effect of this substantial increase in interest rates is yet to be felt,” Lowe said on Tuesday.
“The Board took the decision to hold interest rates steady this month to provide additional time to assess the impact of the increase in interest rates to date and the economic outlook.”
However, Lowe added the “decision to hold interest rates steady this month provides the Board with more time to assess the state of the economy”.
“The Board expects that some further tightening of monetary policy may well be needed to ensure that inflation returns to target,” he said.
– With AAP
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