Monday, March 07, 2005

Historical Interest Rates in Australia

Australian Bank Variable Home Loan Rates 1959 - 2005

The graph and tables on our web-site shows the F05 Indicator Lending Rates, which are about 1.8% higher than the Reserve Bank of Australia's cash rate.

The Reserve Bank sets the cash rate then Australian banks and lenders add their margin of approx 1.8% to get the rate at which they lend to borrowers for loans and mortgages. If you have an existing variable rate home loan then your lending bank will generally increase the interest rate on your loan by whatever increase the Reserve Bank makes to the cash rate, or decrease it if the opposite occurs.

The Reserve Bank of Australia's (RBA) main responsibility is monetary policy. Policy decisions are made by the Reserve Bank Board, with the objective of achieving low and stable inflation over the medium term. Other major roles are maintaining financial system stability and promoting the safety and efficiency of the payments system. The Bank is an active participant in financial markets, manages Australia's foreign reserves, issues Australian currency notes and serves as banker to the Australian Government.

The Reserve Bank's 'charter', says:

'It is the duty of the Reserve Bank Board, within the limits of its powers, to ensure that the monetary and banking policy of the Bank is directed to the greatest advantage of the people of Australia and that the powers of the Bank ... are exercised in such a manner as, in the opinion of the Reserve Bank Board, will best contribute to:

(a) the stability of the currency of Australia;
(b) the maintenance of full employment in Australia; and
(c) the economic prosperity and welfare of the people of Australia.'

Click here to see the Interest Rate Graph and Tables...