Major banks pass on RBA’s rate cut, offering $190 relief monthly to homeowners; Westpac is the only holdout.

In Short

Mortgage relief begins today for millions of Australian homeowners as major banks pass on a Reserve Bank interest rate cut, potentially saving borrowers $40 to $190 per month. Despite Westpac not joining this relief, most banks are lowering rates, prompting homeowners to reassess their financial situations amid rising mortgage stress.

Millions of Australian homeowners will benefit from mortgage relief starting today. Commonwealth Bank, ANZ, and NAB are passing on the Reserve Bank’s interest rate cut from 4.35 per cent to 4.10 per cent.

This means homeowners will see reductions of between $40 to $190 per month. 19 per cent of respondents in a Yahoo Finance poll indicated they might have to sell their homes without this cut.

Westpac is currently the only major bank not offering this relief.

Smaller banks

Various banks have announced their new interest rates, with NAB now at 6.19 per cent and Commonwealth Bank at 5.90 per cent, among others. Some smaller banks, like Auswide Bank and Firefighters Mutual Bank, are also lowering rates.

RBA Governor Michele Bullock stated that these changes are effective immediately.

If your bank is not included in today’s announcements, it may provide relief in the coming days. It’s crucial for homeowners to evaluate whether to accept the rate cut based on their financial situation.

Mortgage stress is defined as spending over 30 per cent of one’s salary on a home loan.

Recent data indicates that over 52 per cent of Yahoo Finance readers are using more than 40 per cent of their salary for loan repayments. In Sydney, housing costs consume 57.6 per cent of wages, while apartments take up 46.7 per cent.