A historic cash rate slash has been announced by the Reserve Bank of Australia (RBA), cutting the rate to 2.25% in order to lend more assistance as the economy stutters.
RBA governor Glenn Stevens said rates were on hold at 2.5% for the past 18 months until the bank announced the new downgrade.
Groups such as retailers and mortgage holders are expected to benefit from the cut.
RBA’s widely anticipated move is also expected to “pour fresh fuel onto red-hot property markets” like Melbourne and Sydney.
“The rate cut should encourage many of Australia’s lenders to follow suit and trim the interest on their suite of home loan products. If lenders do pass on the latest rate cut in full we could expect to see more and more potential home buyers jumping onto the property ladder as they look to take advantage of the historically low rate environment, ” Mortgage Choice spokeswoman Jessica Darnbrough said.