SYDNEY, May 2 (Reuters) - National Australia Bank said on Wednesday it will lower its standard variable mortgage rate by 0.32 percent per annum, a day after the central bank lowered the cash rate by a 50 basis points.
The move will see NAB’s variable interest rate lowered to 6.99 percent, the lowest of the country’s big four banks and will be effective from Friday.
“The European debt crisis is having an impact on the global and domestic economy. By maintaining the lowest standard variable rate of the major banks, we have sought to continue to shield our customers from current global economic instability,” said Lisa Gray, Group Executive NAB Personal Banking.
Australia’s central bank cut its main cash rate by a surprisingly aggressive half a point on Tuesday, to the lowest in over two years, and said it was necessary to cut by a deeper margin in order to deliver appropriate borrowing rates.
Movements in mortgage rates have a big economic impact in Australia where more than 90 percent of all home loans are variable. More than a third of Australia’s 8.5 million households have a mortgage.
NAB said the 32 basis point cut will save its customers A$80 dollars per month in interest on an average A$300,000 loan.
Reporting by Amy Pyett; Editing by Lincoln Feast