Mortgage customers missing out on rate cut savings

Font size :

Despite the Reserve Bank’s 0.25 per cent official rate cut last week, mortgage customers are still paying higher rates than expected as money-hungry banks fail to pass on the rate cut in full. In fact, Prime Minister Malcolm Turnbull ordered Australia’s big four banks to give a thorough explanation on how they set their interest rates.

Among the four major banks, the National Australia Bank has been the greediest, keeping 0.86 per cent of the falls from its customers since the cash rate began its downward spiral in November 2011. ANZ, meanwhile, withheld 0.7 per cent of its standard variable rate from its customers, while Westpac and Commonwealth Bank held back 0.68 and 0.66 per cent of the rate cut, respectively. The full rate cut would have allowed customers to save as much as $45 per month.

But according to Mitch Watson, spokesman of financial services company Canstar, many other small lenders also followed the big four’s example.

“A number of smaller institutions have followed the big four’s lead, with only a very small number passing on the full rate cut,” he said.

However, there are still rock-bottom deals available in the three per cent range, which experts advised borrowers to secure. Peter Arnold, a spokesman for financial comparison site RateCity, said smaller lenders are engaged in a ‘rate war’ as they each strive to get the lowest rate on the market. At the moment, lender Reduce Home Loans is offering a variable rate of 3.35 per cent-the lowest-ever deal found on RateCity.

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

CBA unveils new repayment simulator CBA unveils new repayment simulator

The simulator will show customers the differences between different types of repayments Read more

How to tell when a housing market is cooling How to tell when a housing market is cooling You need to check clearance rates, listings, and the price gap, among other factors ... Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

More mortgage news and articles

Sponsored Links

Tuesday, Sep 26, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
  • How much do you want to borrow?
  • How much deposit do you have?
  • How much is your house worth?
  • How much do you still owe on your mortgage?
  • What type of mortgage do you have?

  • How much is your new home?
  • How much do you want to borrow?
  • How soon do you want a mortgage?
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords