Bank Australia announced today that it will cut interest rates for all variable rate home loans by 0.10%. The cut will take effect from 22nd October 2019.
John Yardley, acting CEO, said the decision comes after careful consideration of the bank’s position in the market and the impact on all of the bank’s customers.
“With this decision, we are making sure our interest rates remain competitively priced while we strike the right balance between the needs of our customers who save and those who borrow.
“We need to acknowledge that due to the Reserve Bank’s efforts to stimulate the Australian economy and create employment, interest rates are now at record lows.
“And whilst borrowers have benefited from a series of rate cuts over the past 11 years, which is borne out by many of our home loan customers who are ahead in their repayments, depositors have felt the impact of falling interest income over this same time.
“Indeed whilst interest rate cuts are welcome news for borrowers they can be devastating for savers who rely on interest income.
“The reality of course is that when retail banks lower the interest they charge on their loans, they need to partially fund this by reducing the cost of interest that is paid to customers who have money on deposit. Therefore, what represents a saving for borrowers is a cost for depositors who fund the loans we provide.
“We thank all our customers for their ongoing support and trust they will see we are committed to a balanced approach to pricing and providing the value all customers should expect from being a part-owner of Bank Australia.”
We’re here to help
We hope you now have a better understanding of why this change is necessary.
For assistance with your banking our team is available on 132 888 (8am-8pm Mon-Fri, and 9am-2pm Sat AEDT) or at your nearest branch.