RBA interest rates live updates: Central bank delivers third rate cut to help struggling homeowners

Macquarie Bank may be promising to cut its variable rates effective Friday, but rival Westpac will make its home loan customers wait another 11 days.

The bank said its change, with the full 25 basis-point cut, would come into effect on August 26.

Investment property loans will alsobe trimmed 25 basis points.

Australia’s biggest home loan lender will cut is variable rates by the RBA’s full 25 basis-points from August 22.

Commonwealth Bank’s retail group executive Angus Sullivan said three rounds of rates would give borrowers “some breathing room back in their budgets”.

“We can see people are responding to lower interest rates in different ways - some are covering everyday costs a little more comfortably, others are getting ahead on their home loans,” he said.

The bank said customers could make adjustments to the monthly repayments through its digital channels on the day after the cut becomes effective.

Of the big four banks, only Westpac automatically lowers a customer’s payments if they have it set to the minimum.

Commonwealth, NAB and ANZ customers must contact the bank if they want their direct debit amounts reduced.

CBA will deliver its full-year results to the market tomorrow.

Governor Michele Bullock has revealed there was “no discussion” of a 50 point cut.

The decision to lower the cash rate by 25 points was unanimous.

Macquaire Bank customers will feel the benefit of the RBA’s decision to cut the official cash rate by the end of this week.

It usually takes banks weeks to bring in a change to variable rates once the central bank makes its move.

But just moments after the announcement, the bank said it would drop its variable home loan rates by 25 percentage points by Friday.

“When the RBA last cut the cash rate in May, we proved that the savings could be passed on to homeowners in just three days, instead of the industry average of 12 days,” head of personal banking Ben Perham said.

“We were the fastest of the major banks and homeowners loved it, so we’re doing it again.

“Savers are sick of banks not being upfront about rate cuts. Some banks are earning millions per day at the expense of their customers by quickly and quietly reducing their savings rates several days before dropping their home loan rates.

“We match the date for changing our consumer deposit rates and home loan rates, and that’s been our approach for years.”

Deloitte Access Economics partner Stephen Smith says the board’s decision to lower rates was clear cut.

But where it goes now is “anything but”.

“With the cash rate now at 3.60 per cent, monetary policy is inching closer to ‘neutral’ territory,” Mr Smith said.

“Unlike many others, Deloitte Access Economics continues to expect interest rates will continue to fall, with another 25-basis point cut pencilled in for the RBA meeting in December on the back of anticipated benign inflation data and relatively soft economic growth.

“That timing would be consistent with a monetary policy board that remains ‘data dependent’ in the face of considerable economic uncertainty and forecasting challenges.”

Official interest rates have not been this low since April 2023.

It was the same month then-Opposition Leader Peter Dutton said the Liberals would not back the Voice to Parliament referendum, a COVID-response weary WA premier Mark McGowan called it quits and tributes flowed following the death of Barry Humphries.

John Wick: Chapter 4 was still big at the flicks and Air brought us the story of Nike’s marriage with Michael Jordan.

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Dr Chalmers said the RBA’s decision to slash rates and give financial relief to Australians shows the Albanese Government’s economic plan is on the “right track”.

“We do have a productivity challenge in our economy. That challenge has been long-standing,” Dr Chalmers said from Canberra.

“It is also global, as the Reserve Bank points out. But it is substantial, and it is the Government’s primary focus - not just next week, at the roundtable, but indeed for the course of this parliamentary term.

“We’ve got a big agenda. Our economic plan is front and centre.

“We’re focused on delivering it. And the best way to work out the next steps in our economy is to do that together, and that’s what the reform round table is all about.

“Today’s very welcome decision on interest rates gives us confidence that we are on the right track”

The Treasurer acknowledged that although the rate cut is welcomed, it won’t fix all problems.

“These rate cuts won’t solve every problem that we have in our economy. But they will certainly help,” Dr Chalmers said.

“This relief is welcome, because it will take some of the pressure off millions of Australians with a mortgage.

“But this progress on interest rates, on inflation, on real wages and in the budget also puts us in good stead to focus even more substantially on the bigger structural issues in our economy as well.”

Dr Chalmers said the Government’s focus on productivity continues to be crucial for Australians and the economy.

Dr Chalmers said today’s cut was due to the hard work of Australians.

“Now, this welcome decision wouldn’t be possible without the progress that Australians have made together on inflation,” he said.

“Getting inflation down from those very high peaks in the year that we came to office, down to well within the Reserve Bank’s target range, has given the independent Reserve Bank the confidence to cut interest rates three times this year.

“To give you a sense of the achievement here, the Australian people together for the first time in almost two decades have delivered an outcome in the labour market and in interest rates which means that for the first time in almost two decades, we’ve seen three interest rate cuts in a calendar year with the unemployment rate still lower than 5 per cent.”

Treasurer Jim Chalmers has welcomed the RBA’s decision to slash the official cash rate to 3.6 per cent, celebrating the lowest interest rate in more than two years.

“This means three interest rate cuts in six months,” Dr Chalmers said.

“It means the lowest interest rates for more than two years.

“This is very welcome relief for millions of Australians.

“It will put more money in the pockets of people who are under pressure.

“It means $109 a month for every $700,000 owed, and the three cuts this year together are about $330 a month, or almost $4000 a year.”