Lenders pass on full rate cut

Mortgage lenders will be passing on the full 25 basis point reduction in the cash rate, if the rate changes announced yesterday are any guide.

In response to the Reserve Bank's decision to cut the cash rate from 2.5 per cent to 2.25 per cent, ME Bank cut its standard variable rate 25 bps to 5.13 per cent. Its package rate falls to 4.93 per cent. The changes are effective from February 20.

ING Direct will lower the rate on its variable mortgages by 25 bps, effective February 20. The new rate on its Mortgage Simplifier loan will be 4.97 per cent.

BOQ also passed on the full rate cut. Effective February 24, its standard variable rate will move to 4.76 per cent, its Clear Path rate to 4.62 per cent, Clear Path Line of Credit to 4.82 per cent and its Business Term Loan to 7.25 per cent.

A rate cut of 25 bps represents a savings of A$47 a month for a borrower with a $300,000 mortgage.