Lender reduces mortgage rate

Bank of Queensland was the first lender to show its hand, dropping its standard variable home loan rate by 20 basis points.

“Given the continuing pressure on the cost of funding a 20 basis point reduction is the best balance between our customers and shareholders," BOQ chief executive Stuart Grimshaw said in a statement.

While all of the lenders are yet to move on rates, few will be surprised if the banks choose to pass on just part of the rate cut.

In June, ANZ was the only major to pass on the rate cut in full, with the Commonwealth Bank of Australia, National Australia Bank and Westpac citing higher funding costs as the reason for the partial rate cut.