Browse Forums General Discussion 1 Feb 03, 2009 4:18 pm THE Reserve Bank has cut interest rates by 100 basis points to 3.25 per cent, citing a "significant deterioration" in world economic conditions since late last year.
Interest rates are now at their lowest point in 45 years. Out of the big banks, Westpac has passed on the full 100 point cut to its standard variable home loans. Commonwealth, ANZ, NAB say rates are currently under review. The cut in rates comes on the same day the Government announced a massive $42 billion stimulus package in a bid to kickstart the economy. The Government said it expected economic growth to be just 1 per cent in 2008-09, slowing to a mere 0.75 per cent in 2009/10. RBA governor Glenn Stevens said the board took into account the package of measures announced by the Government earlier today. "The combination of expansionary monetary and fiscal policies now in place will help to cushion the Australian economy from the contractionary forces coming from abroad," he said. The one percentage point cut will save home owners an average of $186 a month in mortgage repayments. The nation's banks had yet to announce any reduction in home loan rates, with most saying rates were currently under review. Economists had expected a cut of at least 75 basis points given the rapid deterioration in the global economy since the central bank last cut the rate in December. The RBA has cut the rate by a massive 400 basis points since September last year in attempts to protect the economy from sinking into recession. Williams Landing Stage 10 - Kingwell Neighbourhood Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 2Feb 03, 2009 4:30 pm It's good news.
There is a thread on the followup cuts by lenders https://forum.homeone.com.au/viewtopic.php?t=13460 Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 5Feb 03, 2009 9:43 pm This is fantastic news! Last I heard only the Westpac and ANZ have so far passed on the full 1%. Other lenders are still to decide. Word is there may be another rate cut next month. Fingers crossed that there is! Fence, paving, retaining wall - CHECK! Still so much more to do..... Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 7Feb 04, 2009 8:27 am Yeah fantastic news for those who weren't "smart" like me in 2007 who thought, well - it's our first loan so we should have stable repayments and interest rates are on the way up so let's fix 70% of the loan for 3 years.... oh look how smart we are - interest rates have gone up 1.5% since we fixed....
....then came the end of 2008 and we started to think oh no..... Now we are are going dammit not so smart after all. On the upside 30% of our loan is getting the lower rates. Ah well, live and learn and I still stick by my line of thought that it was a good idea to get used to regular repayments! Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 8Feb 04, 2009 9:46 am did you notice cba said they may not pass on and other rate cuts in full,Does not worry me as I was the silly one to lock in last august at 8.2 not to worry hoping they are still low when the fixed rate finishes finished building 40 square home on 5 acres with perry homes.working on the landscaping just finished pool deck with ://forum.homeone.com.au/viewtopic.php?f=31&t=2217 Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 9Feb 04, 2009 9:49 am Don't worry, there is always smarter people than you. We fix 100 of the loan for 5 years, so we have to wait until march 2012 with 7.2 %. I don't know how many people are stuck with fix rates, but I think if the rates go down again, the goverment should do something for the "smart and conservative people" like us. I cannot be that only the banks are the ones that always win.
Does somebody knows about any way to escape the banks from this fix rates? Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 10Feb 04, 2009 10:03 am Eze - they're fixed rates for a reason. What if the rates were 12% now? Would you expect the bank to be asking if they can increase your fixed rate to 12%? It does kind of work both ways Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 11Feb 04, 2009 10:20 am Yes
But I think the bank are a bit abusive about the Early repayment adjustment. I tried to get out of the fixed rate last october when their 3 year retail fixed rate was the same as my fixed rate and theywanted to charge me 16.000 dollars. To calculate this Early repayment they use the difference between my retail fixed rated and the wholesale interest rate at the time the cancellation, so even if the situation was estable and the retail fixed rate now and then were the same and the wholesale rate now and then were the same I would still have to pay a lot of money. I would be happy with a tax exception from the money I am earning in interest on my savings and that I cannot payback to the bank Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 12Feb 04, 2009 10:24 am Eze the goverment should do something for the "smart and conservative people" like us. I cannot be that only the banks are the ones that always win. Why should the "government" do anything...you want to breach a contract which you were quite happy to sign based on a gamble made on your part...similarly I gambled on a variable rate...I paid when rates went up and am now reaping the rewards for my gamble...you may have been "conservative" the "smart" bit will be decided on the maturation of your loan in whatever years you have left. When banks offer a fixed rate they know that over the long term they win...like a casino...the "bank" always wins. mmm....donuts Homer Simpson 1956- Links: Site Costs Ready Reckoner | H1 Addiction Medical Advice | Château TDL: The Backyard Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 13Feb 04, 2009 10:39 am Well in my opinion , the "Government" is doing something to help the people that are on variable rate by bringing the rates down. So why shouldn't they do something to help the people with fixed rate. I wasn't trying to do any gambling when I signed for a fixed rate. On the other way I was trying to be conservative. Now if suddenly the government changes the rules I would also like to be considered. I mean is not one or two points changes in one or two years. They bring the rates almost 400 points down in 6 month and keeps coming down Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 14Feb 04, 2009 10:40 am to_do_list Eze the goverment should do something for the "smart and conservative people" like us. I cannot be that only the banks are the ones that always win. Why should the "government" do anything...you want to breach a contract which you were quite happy to sign based on a gamble made on your part...similarly I gambled on a variable rate...I paid when rates went up and am now reaping the rewards for my gamble...you may have been "conservative" the "smart" bit will be decided on the maturation of your loan in whatever years you have left. When banks offer a fixed rate they know that over the long term they win...like a casino...the "bank" always wins. I agree - and if the bank didn't win, so many people would be in a LOT of trouble right now! And I'd like to add - Eze, if you're smart, you would also be putting your savings into an offset account instead as you would save on your loan and not pay tax on interest, and if you have savings accumulating interest to such a high degree that you can't pay the tax, I'm sure you can certainly afford to put a little bit aside for tax time so you can easily pay it back! Two very easily solutions there, didn't take much thinking! Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 15Feb 04, 2009 10:43 am Eze Don't worry, there is always smarter people than you. We fix 100 of the loan for 5 years, so we have to wait until march 2012 with 7.2 %. I don't know how many people are stuck with fix rates, but I think if the rates go down again, the goverment should do something for the "smart and conservative people" like us. I cannot be that only the banks are the ones that always win. Does somebody knows about any way to escape the banks from this fix rates? Part of being "smart and conservative" is diversification. Like a share portfolio, don't put your eggs in one basket. Putting 100% of your loan in fixed is far from "smart". Proper hedging of interest rate fluctuations requires a fixed and variable portion. Doing this means that if the rates drop, you'll be paying a higher rate on average than most people but lower than if you put all your money in fixed and if the rates increase, you'll be paying less than most other people but not as little as those who did 100%. This way it flattens out any rate fluctuation trends but still gives you a bit of flexibility when changes do occur. Saying the government owes you because of a poor financial management decision you made is like saying "I bought shares yesterday and today they dropped by 10%, the government should reimburse me because all I was trying to do was be "smart and conservative" by putting my money in solid blue chips". Stevep79 & Principessa Finished building Wisdom Homes Impression 33mkII in The Ponds, Sydney http://lilypadintheponds.blogspot.com Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 16Feb 04, 2009 10:44 am Another one comes to the party!!! Perfect it drops 10 days before we make our first extra money repayment
ST. GEORGE Bank has followed the big four and passed on yesterday's official interest rate cut in full. St George is a subsidiary of Westpac Banking Corporation, announced that following the Reserve Bank's (RBA) decision to reduce the cash rate it was lowering its standard variable home loan interest rate by the full one percentage point to 5.89 per cent The cut will be effective February 13. “St.George is very pleased to be able to pass on the full RBA rate cut, providing customers with a significant reduction in their home loan interest rate, which will come as a welcome relief for many Australian households.” said Andrew Moore, St.George General Manager Retail Bank Distribution. “We also hope that this move will continue the trend of encouraging first home or prospective buyers back into the market." Westpac and ANZ announced 100 basis point cuts to their standard variable home loan rates yesterday, taking rates to 6.91 per cent and 5.91 per cent respectively. NAB and Commonwealth Bank both passed on a one percentage point cut in standard variable home loan rates this morning. NAB and Commonwealth Bank mortgage rates will both drop to 5.74 per cent also from February 13. Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 17Feb 04, 2009 10:47 am Spot on Steve. Good post.
Suggesting the government bail people out of the decisions they made and now regret is bizarre. Besides, the government isn't making the changes. The independent RBA is doing it. Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 18Feb 04, 2009 10:49 am If you put your money on an offset account linked to a fix rate mortgage you only get a 1.5% on that money not the full fixed rate from the mortgage, so its the same than to put the money at 4% and then pay 2% in taxes.
And i am not complaining that I cannot pay the taxes for the money earn by interest. Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 19Feb 04, 2009 10:51 am Eze Now if suddenly the government changes the rules I would also like to be considered. I mean is not one or two points changes in one or two years. The government didn't change the rules...to paraphrase Clinton..."it's the economy". Do you think Government actually is control of the situation at present...China has reduced the use of us as their quarry...the US deficit is dwarfing ours by orders of magnitude...Europe is a cluster-beep-...the best we can hope is that the recession is not as bad as could be and hence the stimulus. The old saying that if the US sneezes we get the cold...well the US is in hospital with an unknown flu and the Chinese economy is providing life support by buying US treasury bonds to keep it alive. The reduction in interest rates (more accurately the cash rate) is a response to the economic situations around. The boom driving the high interest rates was always going to bust...your gamble was that the boom would last longer...my gamble was that the boom wouldn't. Again we'll sent at the maturation of our respective loans who was right. The fact that you didn't recognise fixing your rate as a gamble...doesn't change the fact that it was a gamble. mmm....donuts Homer Simpson 1956- Links: Site Costs Ready Reckoner | H1 Addiction Medical Advice | Château TDL: The Backyard Re: Reserve Bank cuts interest rates by 100 basis point to 3.25% 20Feb 04, 2009 10:55 am mrs_smith you would also be putting your savings into an offset account instead as you would save on your loan I thought this wouldn't work on fixed interest? The whole point is that it is fixed - so adding extra money to an offset would not affect your interest calculation? Maybe the variable portion? Smart money would have been on having fully variable and hammering the payments down/offset. Then it wouldn't matter what the interest rate was, because you don't have the loan enough for the banks to gouge you. This should not happen, when the timber arrives on site, bent studs should be separated to be cut for noggings and blocks. The studs should never be bad enough to… 4 11824 That sucks! Hope it all works out. Good to move away from steel anyway for all your reasons, but it's also thermally poor. 16 17858 As is per usual for many of the past failed RWH regulations, it is probably traceable to a bureaucrat who's ego overrode the need to seek the appropriate expert… 1 1003 |