# Reserve Bank Cuts Interest Rate To Historic Low 1.75%

- Link: https://stayathomemum.com.au/work-money/finance/reserve-bank-cuts-interest-rate-to-historic-low-1-75/
- Published: 2016-05-04T09:00:50+10:00
- Author: Caroline Duncan

## _Australia’s official interest rate has been cut to 1.75 per cent by the Reserve Bank – a new historic low._

It should bring down the average standard variable home loan rate down to 4.52 per
cent, saving home owners an average of $72 per month on a $500,000 mortgage.

However, last time the rate was cut, in May 2015, around 60 per cent of lenders 
failed to pass on the cut in full. It’s a good idea to shop around to make sure 
you’re getting the best deal on your mortgage.

The cut has been made in response to pressures on the economy from a low-rate of
inflation.

Low interest rates are bad news for people trying to save money. There are also 
concerns it could put more pressure on the housing market, making it more difficult
for first homeowners to purchase a house.

However in a statement the Reserve Bank Governor Glenn Stevens said homebuyers shouldn’t
be adversely affected:

“In reaching today’s decision, the Board took careful note of developments in the
housing market, where indications are that the effects of supervisory measures are
strengthening lending standards and that price pressures have tended to abate. At
present, the potential risks of lower interest rates in this area are less than 
they were a year ago,” he said.

### _Is this good or bad news for you?_

![author avatar](https://secure.gravatar.com/avatar/b860f553e8ded813ef1efe9dc0c295aaafb562c488421df4566fb8f71d3e1347?
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 Caroline Duncan

 Caroline Duncan is a freelance journalist and photographer with almost 20 years'
media experience in radio, magazines and online. She is also a mother of three daughters,
and when she's not writing or taking pictures, she's extremely busy operating a 
taxi service running them around to various activities. She can't sew and hates 
housework.

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