New historical low cash rate passed onto business borrowers
Banks have passed on standard variable rate cuts to benefit business borrowers as well.
Today's rate cut announcement, which has brought the official cash rate down to the historical low of 1.50%, will benefit some business borrowers. All of the Big Four banks – CommBank, ANZ, NAB and Westpac – have so far announced that they will be reducing their standard business variable interest rates, with other banks expected to follow.
While a rate cut or rate rise is traditionally associated with a movement in home loan rates, variable business loan rates, term deposit and savings rates have also been known to change.
- NAB has reduced its rate for standard variable business rate lending products by 0.10% p.a., which will be effective from Friday 19 August 2016.
- CommBank will reduce its rate for business variable cash rate products by 0.13% p.a. which will be effective from Friday 19 August 2016.
- Westpac will reduce its variable rates for all business loans by 0.10% p.a. from Tuesday 23 August 2016.
- ANZ will reduce its variable rates for all business loans by 0.10% p.a.
- Bank of Melbourne, BankSA and St.George will cut their variable rate business loans by 0.10% p.a which will all be effective from Tuesday 23 August 2016
Bank customers holding savings accounts and term deposits may also be affected by the rate cut, with some banks already announcing changes in product rates.
According to Matt Comyn, group executive of retail banking services at CommBank: “While the circumstances of each RBA rate decision will always vary, we’ve carefully considered the current environment and the needs of both borrowers and savers."
NAB's chief operating officer Antony Cahill said the bank had carefully considered the needs of customers and shareholders as well as the current economic regulatory environment when making this decision.
ANZ Group executive Australia Fred Ohlsson also said the decision was a considered one for the bank which aimed to balance the expectations of home loan customers while supporting savings customers.