Will the big four banks, who happen to hold over three-quarters of Australian home loans, pass on yesterday’s historic cash rate cut to their customers?
That’s the big question, as numerous smaller lenders have already dropped their home loan rates, passing on to borrowers the 0.15 per cent cut announced yesterday.
So far, Commonwealth Bank and Westpac have both opted not to pass on the rate cut to its variable rate customers, but will cut fixed rates.
“Governor Lowe has said he believes this rate cut will be passed through as people refinance or renegotiate their home loan, but he’s forgotten about the thousands of Australians who aren’t in a position to do so,” Sally Tindall, research director at RateCity.com.au, pointed out.
“These are the people who need this rate cut, but based on the response from the banks so far, they’re precisely the ones who are going to miss out.”
Ms Tindall said the banks “served up some sour news” to their variable rate mortgage customers.
“Anyone who’s lost their job, or is on a mortgage deferral or who simply doesn’t have enough equity in their loan to refinance is in mortgage prison; they can’t switch lenders,” she continued.
“They either have to stick on a high variable rate or fix with their current bank.
“A rate cut has the potential to put $33 per month back in the hands of the average mortgage holder, that’s almost $400 per year.
“Governor Lowe has made it clear he expects these rate cuts to be passed through to borrowers.
“It appears the big four banks are playing a game of poker, waiting for their opponents to show their hand.
“If the big banks don’t pass on this rate cut in full, millions of Australians could miss out on hundreds of dollars at a time when families need it most.”
RateCity.com.au is tracking the lenders lowering their rate in real time; below are those who have played ball so far.
“If your bank hasn’t made a decision, call them, tweet them, or comment on their Facebook page to put pressure on them to do the right thing by you,” Ms Tindall continued.
“Now’s the time to remind them that you’re expecting a cut.”