# Home loan variable rates



## newtoaus

Hi Guys, after the recent cut to interest rates by NBA by 25bps, how does it reduce the home loan interest rates? Can someone explain? I am staying overseas and have a property in Australia. My home loan is variable from Day 1 which i bought 6 months back. The interest rate that time was 4.81%, after this rate cut by 25 bps, what it should be? 

And, from which date the reduced rate should be effective? 

I am asking this ques here, because i know in many countries, extablished and famous banks also cheat their customers in this regard. So, is there any catch in Australian market for the home owners?

Thanks in advance.


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## Mish

The new interest rate should be 4.56% but the banks don't always pass on the full decrease.

If you are on a fixed loan then you don't see the decrease at all because you are locked in for a specific period of time.


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## newtoaus

Hi Mish, thanks for your reply. Mine is variable from day 1 as i mentioned in my post. S0, 25 bps mean current rate minus .25 is it? 

and when should it be effective from?


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## Mish

Everything is up to the bank. They can apply .25 or sometimes they may only apply .20 if they want.

They will usually change the rate within a few days of the RBA making the decrease.


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## mohini

Hi,

Fluctuation in the rate of interest is very but for a common man like us, it get difficult to follow each and every update of the loan. One of my friends suggested a company name Eden Loans, they help me in getting the loan and after procedures too. You can check their other services from their website.


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## JandE

The banks do not need to pass on any change in the government cash rate. In fact they recently increased mortgage rates.

They can alter rates whenever they wish.
More often than not though they will follow the RBA rate changes within a week or so.

A great source for checking rates is 
Compare Interest Rates for Home Loans and more


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