ANZ today passed on the full amount of the Reserve Bank rate cut, cutting its standard variable home loan rate by 0.25 per cent.
The bank defied market expectations, announcing its standard variable mortgage rate will drop to 6.8 per cent effective from next Friday.
Mr Swan welcomed the ANZ decision for giving households a "fair go'' and throwing down the gauntlet to the other banks to do the right thing.
"The heat is really on the other banks, and if they don’t do the right thing we've made it much easier for their customers to walk down the road and get a better deal,'' Mr Swan said.
"It's good to see that competition at work in this decision by ANZ. Returning the Budget to surplus has given the Reserve Bank the flexibility to cut rates should it decide to do so – it’s great to see ANZ customers benefiting from this today.''
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Mr Swan claims a family on a $300,000 standard variable rate mortgage is now saving over $3,500 a year in repayments compared to when the Liberals left government.
ANZ Australian chief executive Philip Chronican said home loan customers are doing it hard at the moment and passing on the full RBA rate cut was the "right decision'' in the circumstances.
"Funding costs remain elevated as a result of the deteriorating economic situation in Europe and strong competition for deposits,'' he said.
"But the bottom line is that while deposit customers are receiving very competitive deposit rates, many of our borrowing customers are under pressure from a range of other costs. We felt that reducing interest rates by 0.25 per cent per annum for home borrowers and for small business was the right decision in these circumstances.''
The bank said the 25 point decrease will save customers about $13.50 per week for the average home loan of $280,000, while small businesses will save $6.25 per week for the average business loan of $130,000.
Although there was strong economic growth data this week, we know that several major states and many of our customers are not directly benefiting from the strength of the resources sector," he said.
He says despite funding costs remaining elevated, the bank felt its customers needed a cut.
"We were looking ahead and looking at the numbers and felt that with the adjustments in pricing that we have made over the last two to three months, we felt on this occasion moving the home loan rate by the same amount as the Reserve Bank was not going to cause us any major grief," he said.
Mr Chronican says the bank recognises that some customers outside the mining sector are struggling.
The announcement puts pressure on ANZ's rivals to follow suit.
The Federal Treasurer, Wayne Swan, has welcomed ANZ's move.
Mr Swan says it is now incumbent on the other banks to follow suit.
"I think customers will walk down the road and get a better deal if they don't see the full pass-through from the major banks following this decision from the ANZ," he said.
"They will rightly be very upset with their bank if we don't see a full pass-through from the major banks.
The bank defied market expectations, announcing its standard variable mortgage rate will drop to 6.8 per cent effective from next Friday.
Mr Swan welcomed the ANZ decision for giving households a "fair go'' and throwing down the gauntlet to the other banks to do the right thing.
"The heat is really on the other banks, and if they don’t do the right thing we've made it much easier for their customers to walk down the road and get a better deal,'' Mr Swan said.
"It's good to see that competition at work in this decision by ANZ. Returning the Budget to surplus has given the Reserve Bank the flexibility to cut rates should it decide to do so – it’s great to see ANZ customers benefiting from this today.''
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Mr Swan claims a family on a $300,000 standard variable rate mortgage is now saving over $3,500 a year in repayments compared to when the Liberals left government.
ANZ Australian chief executive Philip Chronican said home loan customers are doing it hard at the moment and passing on the full RBA rate cut was the "right decision'' in the circumstances.
"Funding costs remain elevated as a result of the deteriorating economic situation in Europe and strong competition for deposits,'' he said.
"But the bottom line is that while deposit customers are receiving very competitive deposit rates, many of our borrowing customers are under pressure from a range of other costs. We felt that reducing interest rates by 0.25 per cent per annum for home borrowers and for small business was the right decision in these circumstances.''
The bank said the 25 point decrease will save customers about $13.50 per week for the average home loan of $280,000, while small businesses will save $6.25 per week for the average business loan of $130,000.
Although there was strong economic growth data this week, we know that several major states and many of our customers are not directly benefiting from the strength of the resources sector," he said.
He says despite funding costs remaining elevated, the bank felt its customers needed a cut.
"We were looking ahead and looking at the numbers and felt that with the adjustments in pricing that we have made over the last two to three months, we felt on this occasion moving the home loan rate by the same amount as the Reserve Bank was not going to cause us any major grief," he said.
Mr Chronican says the bank recognises that some customers outside the mining sector are struggling.
The announcement puts pressure on ANZ's rivals to follow suit.
The Federal Treasurer, Wayne Swan, has welcomed ANZ's move.
Mr Swan says it is now incumbent on the other banks to follow suit.
"I think customers will walk down the road and get a better deal if they don't see the full pass-through from the major banks following this decision from the ANZ," he said.
"They will rightly be very upset with their bank if we don't see a full pass-through from the major banks.
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