The Reserve Bank is set to reduce interest rates by a further 0.50 percentage points within weeks after its most aggressive series of cuts since the 1991 recession.

Yesterday's surprise cut of 0.75 points - the third in three months - brings the total fall in the bank's cash rate since September to 2 percentage points, undoing almost five years of rises. If fully passed on, the recent cuts would bring the standard variable mortgage rate down from 9.6% to 7.6% taking $400 a month off the cost of servicing a $300,000 loan.

A further cut expected in December would bring the total saving to $500.

Source: The Age, Monday Nov 5, 2008, Peter Martin