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Interest rate change announcement

Interest rate change announcement

Interest rate change announcement

October 2019 Reserve Bank announcement

Date – 14/10/2019

Following a reduction to the official cash rate announced by the Reserve Bank of Australia (RBA) at their October Board meeting, WAW will make the following changes:
  • Residential and commercial variable rate loans will reduce by 0.14% p.a., effective 12 November 2019 for existing borrowers and 16 October 2019 for new borrowers. 
  • Fixed rate loans will reduce by up to 0.75% for new loans, effective 16 October 2019.
  • Various changes of between 0.10% and 0.25% will be applied to term deposit rates for new and maturing deposits from 16 October 2019.
  • Various changes of between 0.1% and 0.25% will be applied to savings account interest rates for new and existing accounts from 1 November 2019.

These updates follow a string of recent announcements by the RBA to bring the official cash rate down to a historic low of 0.75%.

Following these changes, WAW’s Standard Variable Rate remains well below that of the major and regional banks in Australia, at just 4.49% p.a.

WAW’s decisions in this ultra low rate environment continue to be based on the organisation’s desire to balance the impact that successive rate cuts has on both depositors and borrowers. The Credit Union remains focused on being able to offer very competitive term investment and savings rates to thousands of depositors, while also ensuring that borrowers have access to the savings that reductions to the cash rate deliver.

A further critical consideration in this latest decision was that many of WAW’s competitors passed on increases to loan rates on several occasions throughout 2018 and early 2019, outside of any official cash rate announcement by the RBA, which WAW did not follow. WAW’s decision to maintain our interest rate settings during that time saved a considerable amount of interest, in aggregate, for our borrowers. 

WAW CEO Michael Mack said: “We understand that borrowers may be disappointed in the decision not to pass on the full reduction to their loans. It is important, however, to note that WAW did not pass on out-of-cycle increases to loan rates in 2018 and 2019 and that we need to balance the impact between customers who rely on decent returns from their investments and savings and those customers with record low interest rates on their loans. We must also remain focused on continuing to invest in our staff, branch network, new technology enhancements and improved product offers for customers”.