While this will give some relief to mortgage holders, it will also impact those with other types of loans, as well as interest rates on savings accounts.
How will rate cuts impact savings accounts?
Commonwealth Bank is passing on the full cut to its Goal Saver account, and 0.2 per cent to its Netbank Saver account.
Source: SBS News
Sally Tindall, data insights director at financial comparison site Canstar, said those with savings accounts who have benefited from rate rises will now experience a reduction in earnings from interest.
“So when the cash rate was on the rise, variable rate borrowers were feeling the weight of the 13 RBA rate hikes because they were passed on in full by the banks to their existing customer base. However, savers finally started seeing decent returns on their nest eggs.”
“Banks don’t typically rush out the door with bad news, and we’re expecting bad news for savings rates,” she said.
Will term deposits be impacted by rate cuts?
“They look at competition between the lenders, they look at appetite amongst consumers for these type of products, and they also look at what variable mortgage rates might do in that fixed rate term.”
Are personal loans and car loans impacted by interest rate cuts?
“Personal loans including car loans can be based on a variable rate, and we could potentially see these rates go down on the back of an RBA cut,” Tindall said.
Credit card interest rates are not impacted by RBA decisions.
