The rate now stands at 4.25 per cent, down from the peak of 7.25 per cent in March this year.

In Batemans Bay and surrounding towns it is a boost for those with a mortgage on variable interest rates but could marginally affect pensioners, depending on incomes from bank term deposits.

Commonwealth Bank branch manager Mark Southwell was happy that his bank’s customers received the full percentage cut before Christmas, a time when every dollar matters.

“The best thing is the timing,” he said. “To see that before Christmas is a bonus. The average home loan is going to be $200 a month less.”

The continual cuts in the interest rate set by the Reserve Bank and an increase in the first home buyers’ grant has caused an increase in the number of people applying for loans at the branch.

“There has been an increase on what it was four, five, six months ago,” he said.

Independent financial planner Diego Carrasco also said it would be beneficial for people in the housing market but that it wasn’t all good news.

“It can be very good but bad too. I’ve been reviewing retirees and the rate cut hurts their back pocket,” he said.

“People should protect themselves. If they’ve got debt, get rid of it.”

Though the rate cut was considered a mixed bag for local residents by financial planner Bruce Brawn, he said it would provide relief for mortgage holders but term deposit investors would not benefit.

“The rates will entice people into the market again, but they are still cautious,” he said.

“Ordinary bank rates for bank accounts and term deposits rates have come down a lot. Pensioners who rely on term deposit interest would be worse off marginally.”

The Commonwealth Bank and the National Australia Bank both passed on the one per cent rate cut. ANZ reduced rates by .83 per cent and Westpac by .80 per cent.