National Australia Bank and the Bank of Queensland have become the first banks to lower interest rates, but both say they won’t pass on the full 50 basis point cut recommended by the Reserve Bank of Australia.
NAB said it would cut its standard variable home loan rate by 32 basis points, to 6.99 per cent, while BoQ announced today it would cut its variable home loan and business loan rates by 35 basis points.
“We’ve held back 15 basis points due to increased competition in retail term deposits, which continues to put upward pressure on the Bank's cost of funds,” BoQ managing director Stuart Grimshaw said in a statement
“When making decisions on rates we consider the needs of our customers and those of our shareholders.
“It is a difficult balancing act, but we believe passing on a 35 basis point cut is the responsible course of action this month.”
The cut will bring BoQ’s standard variable home loan rate down to 7.11 per cent per annum, after the RBA slashed official interest rates to 3.75 per cent yesterday.
BoQ said its rate cut would be effective from May 11.