Westpac cuts standard variable home loan rate by 65bps
05 Nov 2008 5:40 PMWestpac cuts standard variable home loan rate by 65bps
By Trevor Chappell
MELBOURNE, Nov 5 AAP - Westpac Banking Corporation has became the second ofthe four major banks to its cut its home loan rate after this week's bigger than expected easing in monetary policy.
However, like Commonwealth Bank of Australia, Westpac will not pass on in full the 75 basis point cut in the overnight cash rate by the Reserve Bank of Australia (RBA), citing substantially higher funding costs.
Westpac said today it would cut its standard variable mortgage rate by 65 basis points to 7.71 per cent, effective from Monday, November 10.
CBA said yesterday it would lower its variable home loan interest rates by58 basis points.
AMP Banking today also cut its standard variable home loan interest rate, but the cut was by 75 basis points in line with RBA cut announced yesterday.
AMP's bank's new standard variable home loan rate, 7.87 per cent per annum,will be effective Sunday 16 November for new customers and Monday 17 November for existing customers.
Westpac said today it would also reduce interest rates on consumer credit cards and business credit cards as much as 0.8 percentage points, from 14 November.
"Westpac is sensitive to the challenges being faced by many working families," Westpac group executive, retail and business banking Peter Hanlon said.
"However, we are still having to meet substantially higher funding costs.
The bank said that small business owners in particular would benefit from reduced credit card interest rates.
Federal Treasurer Wayne Swan has urged banks to think of their customers and pass on the latest official interest rate cut in full.
Mr Swan said the retail banks had benefited from the certainty provided by the federal government's move to guarantee deposits.
He said the banks had been told they could return the favour by passing on interest rate cuts in full.
The banks have said that they cannot pass on the RBA interest rate cuts in full until the cost to the banks of obtaining their own funding - made moredifficult and expensive by tight global credit markets - came down.
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