AMP passes on full interest rate cut

MORE banks cut their interest rates yesterday, but only one has passed on the full 0.75 per cent cut made by the RBA.

AMP passes on full rate cut

MORE banks cut their interest rates yesterday, but only one has passed on the full 0.75 per cent cut made by the Reserve Bank of Australia.

AMP Banking issued the challenge to its rivals after it said yesterday it will cut its standard variable home loan interest rate by 0.75 per cent.

Westpac, ANZ and NAB also moved yesterday, cutting their standard variable mortgage rate by 0.65 per cent, 0.58 per cent and 0.62 per cent respectively.

The cuts by ANZ and NAB eclipse the 0.58 per cent cut made by the Commonwealth Bank on Tuesday.

But home owners who celebrated when the RBA cut rates by a larger than expected margin on Tuesday are nervous as it becomes apparent most banks are refusing to pass on the full amount.

Simon and Ingrid Whitford, who have a loan with ANZ for their Baulkham Hills home, were banking on being able to put the money away ready for the birth of their second child.

Mr Whitford has a simple message for his bank: "They should pass it on''.

"I understand that their borrowing costs have gone up, but they are still making record profits so they can afford it,'' he said. The latest cut will save them $200 a month in mortgage repayments.

AMP's rate reduction brings the rate on its standard variable home loan down to 7.87 per cent, effective from November 14. Westpac's new variable rate slips to 7.71 per cent, NAB's reduces to 7.74 per cent, which is the same as Commonwealth Bank's new rate and that of ANZ.

In its announcement ANZ said it would also cut rates for credit cards and personal loans by up to 0.75 per cent.