Farmers and city mortgage borrowers got their long-awaited rate relief today after the Reserve Bank cut the interest rate, its first reduction in nearly seven years.
The central bank lowered the cash rate 0.25 of a percentage point to 7pc from its 12-year high of 7.25pc, in a move that puts pressure on lenders to reduce their rates in response.
The rate cut will be especially welcomed to those who have struggled with the high loan repayments at a time of rising food and petrol prices.
The reduction, if passed along by lenders, will trim $40 off the monthly repayments on a typical 25-year, $250,000 home mortgage.
The RBA's decision, which was almost universally expected by analysts, may also signal further cuts to come.
The National Australia and the ANZ, are expected to honour their promise to apply the cut to their standard variable mortgage rates.
The ANZ's standard rate would fall from 9.67pc to 9.42pc and the National Australia's standard rate from 9.61pc to 9.36pc.
The Commonwealth Bank said it had promised to "do our best to pass on as much as we can to our customers".
On Sunday, non-bank lender Wizard got in early, cutting its standard variable mortgage rate by 0.25 percentage points to 9.29pc.
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