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Australia's CBA follows NAB with 20bp cut in mortgage rates

Friday, 5 Oct 2012 | 12:10 AM ET

SYDNEY, Oct 5 (Reuters) - Commonwealth Bank of Australia

cut its variable mortgage rate by 20 basis points on Friday after the central bank dropped its benchmark rate by 25 basis points earlier in the week.

CBA rival National Australia Bank Ltd earlier cut by the same quantum, the first of the big four lenders to partially pass on the rate cut from the Reserve Bank of Australia.

Mortgage rates are very sensitive in Australia where one-third of the population have a mortgage and banks draw criticism for not passing on full rate cuts.

A 25 percent basis points cut reduces monthly repayment on a A$300,000 loan by about A$50.

(Reporting by Narayanan Somasundaram; Editing by Muralikumar Anantharaman)

((narayanan.somasundaram@thomsonreuters.com)(+61 2 93731815)(Reuters Messaging: narayanan.somasundaram.reuters.com@reuters.net))

Keywords: CBA RATES/

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