ALL of the four big banks now have cut interest rates, with ANZ the final bank to join the party, lowering its rate by 37 basis points on Friday.
The ANZ decision will take its variable rate mortgages from 7.42% to 7.05%, compared with NAB's 6.99% rate, Commonwealth Bank's 7.01% and Westpac's 7.09% variable rate.
While the cuts will be welcomed by homeowners and small businesses, none of the banks have met the Reserve Bank's cut of 50 basis points to 3.75% made on May 2.
ANZ's cut will save customers about $20 per week on the average home loan of $280,000, while small businesses will save $9.25 per week for the average business loan of $130,000.
ANZ Australia chief executive Philip Chronican said the RBA's decision had impacted domestic funding sources, giving the bank scope to reduce its rates.
"We continue to work hard to ensure we are competitive despite sustained funding pressure driven by the high rates we are paying to our 2.9 million deposit customers relative to the Reserve Bank's cash rate and the ongoing volatility in wholesale money markets," he said.