None of the Big Four banks chose to pass November’s rate cut on to its variable customers, keeping savings out of reach for millions of mortgage holders and angering some loud voices in the industry. .
Following Tuesday’s announcement, CBA, Westpac, NAB and ANZ were slow to respond and, when they finally did, they chose to only adjust their fixed rates.
The majority of banks have now failed to pass on the RBA’s last two rate cuts, according to Sally Tindall, research director of RateCity.com.au, which means most existing variable rate clients have missed out. a total rate cut of 0.5% this year.
“This latest round of so-called ‘bank cuts’ confirms loyalty is dead and buried,” she added.
âGovernor Lowe had said that a rate cut would help solve the lending problem, but the banks’ refusal to pass on those cuts means people in financial conflict are unlikely to benefit from rate relief.
“Instead, they’re stuck in a mortgage jail paying an almighty interest bill.”
FBAA Managing Director Peter White AM has called the refusal of the Big Four banks to pass the recent interest rate cut “insane”, especially given the current COVID climate.
White said that after spending 40 years in the financial services industry, he should no longer be surprised at how banks prioritize their profits, but he found this latest injustice “beyond belief” nonetheless.
“Haven’t they learned anything from the royal commission?” ” He asked.
âThis is an opportunity for banks to build trust and send the message that they can put people before profits. I challenge them to do just that.
White expressed hope that consumers continue to realize that the Big Four banks aren’t the only options available.
âOther lenders are passing on the reduction and borrowers should speak to their broker to determine what is best for their situation,â he said.
One such lender is ME Bank, which has announced that it will pass on the full reduction in the RBA’s cash rate of 0.15% per annum to all of its existing variable rate home loan customers, starting on the 26th. November 2020.
âWe have spoken to thousands of our home loan clients over the past six months, many of whom have shared concerns about the financial impact of COVID-19 on households,â said Adam Crane, CEO of ME.
âThis decision will help many of these households through difficult financial times. “