Big four made $1.2b from rate cuts
The big four banks’ tactic of “going slow” when passing on rate cuts from the Reserve Bank of Australia (RBA) has seen them pocket $1.2 billion since rate cuts began in 2011, according to research from website Mozo.
Analysis from Mozo showed the banks pocketed $109 million this year alone from delaying the effective dates of rate relief, and $1.2 billion since 2011.
The RBA would announce any rate movement today with speculation that rates could be cut further.
The comparison site also found that following the first rate cut in March, 69 lenders passed on the rate relief in full, while 12 passed on only part of the cut.
Kirsty Lamont, Mozo director, said the banks needed to end their practice of profiteering from the rate cuts.
“With the progressive winding back of Jobkeeper and Jobseeker support payments and the banks mortgage holidays coming to an end, it’s critical the banks pass on this latest cut without delay,” Lamont said.
“If the banks were to pass on a 15 basis point cut to official interest rates in full and without delay, the average owner occupier on a variable home loan rate could be $33 a month better off.”
At the current average variable home loan rate of 3.34%, the monthly repayment for owner occupiers paying principal and interest is $1,761.
If lenders passed on a 15 basis point cut in full, the new average variable rate would be just 3.19%.
When it comes to some of the best variable home loan rates on the market, Mozo found smaller lenders were on top with Well Home Loans offering 2.17%, and Reduce and Tic:Toc were offering 2.19%.
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