INTEREST rates have fallen to 4.5 per cent, providing a massive boost for struggling households and the retail sector ahead of Christmas.
The Reserve Bank of Australia today Tuesday Nov 1 slashed rates by 25 basis points in a bid to boost consumer spending and turn around the depressed property market.
Most of Australia's biggest home lenders cut mortgage rates soon after the central bank reduced the cash rate for the first time since April 2009, and many of the country's small lenders followed suit.
Westpac and Bank of Qld will lower their standard variable home loan rate (SVR) to 7.61 percent.Commonwealth Bank (CBA), Australia's biggest home lender, followed suit, cutting their SVR to 7.61 per cent
Prime Minister Julia Gillard earlier warned the banks that they had "no excuse" if they failed to pass on a likely interest rate cut to customers.
A fall in interest rates to 4.5 per cent has given homeowners a $600 reduction on annual mortgage repayments for a $300,000 loan.New home sales have declined in September, with detached house sales falling to their lowest point in 11 years, according to the Housing Industry Association.
Monetary policy is arguably the most powerful economic tool in modern open economies but interest rate cuts still take time to boost the economy
