CBA has passed on only 0.1% of the .25% RBA cut. It has almost certianly set the precedence that other banks will now not need to pass on the full rate cut. It will be interesting to see what ANZ, NAB and Westpac / St George decide to do.

CBA claims that although the drop is small, they are offering very good cash deposit interest rates at the moment which has seen an influx of cash depsoits to their bank, thus menaing their funding of interest payements has become more expensive.

So much for Banks working inline with the government to help the average Australian…. this days after banks stated they would work with those that lost their jobs to help defer payement on home loans to assist those while they seek for new employment. 800,000 people in Australia are predicted to loose their jobs.

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Government figures have now confirmed what many of us have being saying for months… and that is, it is cheaper to buy than rent in some cases. It is the perfect time for those looking to purchase a home. Prices have stabled, rents are increasing and interest rates have dropped significantly over the last 8 months. This has created, along with the boosted FHOG, plenty of activity in the affordable hosuing market with anything under $600,000 being snapped up by interested parties. There are thousands more home buyers on the prowl at the moment and this is great for the stability of the property market in Australia.

While interest rates are low, and some expect it to go lower during 2009, now is the time to be house hunting with a pre approved mortgage so when you find a home that suites, you can bid confidently at auction or negotiate a private sale.

Good luck with house hunting!

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Australian banks are not expected to pass on the full interest rate cuts that are expected by many economists tomorrow, 7th April 2009. Banks are still claiming that funding costs are still very high.

Economists are mixed with what they are forecasting with some favouring a 50 basis pint cut, while others a 25 basis point, while the majority are expecting rate to be kept on hold at 3.35%, a 45 year low for Australian interest rates.  It is the first time in the many years that AAP has been compiling the monthly rates survey that forecasts for a central bank policy decision have been so close.

If a 25 basis point cut was to occur, this would leave the cash rate at three per cent, it lowest since March 1960 when the average rate was 2.99%.

A 50 basis point cut would put it under the all-time low of 2.89% in January 1960.

The RBA has cut interest rates by 400 basis points over five meetings between September 2008 and February 2009 with the banks  passing on 360 of those basis points to consumers in rate cuts.

Home buyers and propety investors are now saving thousands of dollars a year on their home loans due to the rapid reduction in interest rates over the last 8 months.

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