Interest Rates Cut by RBA to record low 2.25%
The Reserve Bank of Australia (RBA) has made a historic announcement at their monthly board meeting on Tuesday.
The Reserve Bank decided to cut interest rates by a further 25 basis points, officially taking the cash rate to its lowest point ever – with the rate now sitting at just 2.5 per cent.
It is the Reserve Bank's eighth rate cut since November 2011, when it became concerned that Australia's recovery from the global financial crisis was failing to consolidate.
Three of the four major banks immediately announced they would pass on the cut to their mortgage customers, with the National Australia Bank doing so within five minutes of the Reserve Bank's announcement and Westpac cutting its rates by 28 points. The ANZ is likely to follow the other three majors later this week after its monthly rate committee meeting.
The cut brings standard variable mortgage rates at the major banks down to about 5.95 per cent from their 2011 peak of 7.8 per cent, lowering monthly repayments on a $300,000 mortgage by a total of $350.