RBA rate cut update: Which banks have moved?
Challenger banks are leading the response to the RBA’s second rate cut this year with Bank Australia and Bank of Sydney to pass on the full 25 basis point rate cut as the Big 4 hold back up to 15 basis points, says Mozo.com.au.
The financial comparison site says the big banks are also delaying interest rate relief to borrowers by up to 3 weeks, while Bank Australia’s generous cut will be passed on this Friday.
“The Big 4 are set to pocket a whopping $1.6 billion by denying loyal borrowers up to 15 basis points in rate relief and delaying passing on their miserly cuts by up to 20 days,” says Mozo Director Kirsty Lamont.
“At the same time, we’ve already seen two challenger banks announce they will pass on the rate cut in full and Bank Australia’s customers will get their rate relief a full week before the first big bank delivers on its stingy rate cut.”
“The third rate cut in under 18 months is great news for Aussie home borrowers and we are hoping to see a race to rock-bottom rates by challenger banks eager to snatch business away from the big banks,” says Lamont.
All four of the big banks have announced they will cut variable home loan rates, withholding around half of yesterday’s 25 basis point RBA cut.
NAB, ANZ, CBA and Westpac have confirmed they will pass on just 10, 12, 13 and 14 basis points respectively, in August.
Bank Australia announced it would pass on the full 25 basis points, opening the door for big cuts by other smaller lenders.
Mozo have Mortgage House as having the lowest variable rate. Borrowers can compare 478 home loans online using Mozo’s Home Loan comparison tool.
Data insights director at RateCity.com.au Peter Arnold said variable mortgage holders were carefully watching the banks’ moves.
“The major banks’ decisions are disappointing, and it means that around 80 per cent of all variable home loan customers will miss out on some of the savings,” he said.
“The fact that all of the Big Four banks have decided to pass on just half yesterday’s RBA cut isn’t surprising and proves shareholders are their number one priority now.
“But the good news for borrowers is that there’s a home loan rate war going on and plenty of lenders will be passing on the cut in full and are actively hunting for new customers with low rates.
“There are plenty of lenders already offering rates below 4 per cent for owner-occupiers, so if you’re on a rate above 4.5 per cent, the chances are you’ll still be behind, even if you do get a cut.”
“Not all lenders passed on the full 0.25 percentage point saving after the May rate cut, with just 0.18 percentage points making its way to customers on average, leaving borrowers $183 million out of pocket,” he said.
Source: Rate City calculations based on a 30-year home loan at the average SV rate of 4.71 percent.
