'Ditch banks that don't follow RBA', borrowers told

by Adam Smith06 Feb 2012

Borrowers are being urged to desert banks which refuse to pass on RBA rate cuts.

As Tuesday's RBA decision draws near, RateCity chief executive Damian Smith has urged borrowers to ditch major banks if they move independently of the Reserve.

"Borrowers need to be aware that just because the Reserve Bank's cash rate is likely to go down, it doesn't mean lenders will pass on these reductions to borrowers. It wouldn't be the first time when lenders move independently of the Reserve Bank. We saw in November 2010 following a rate rise, major banks were among the first to announce rate increases beyond the 25 bp move by the Reserve Bank," Smith said.

Smith said the banks had already flagged inaction, and said borrowers should seek out smaller lenders.

"Many smaller lenders are offering extremely attractive variable rates, and are hungry for new customers," he said.

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COMMENTS

  • by Fed Up 6/02/2012 9:53:11 AM

    The banks fear competition. Politicians are weak and narrow minded because of the financial benefits their respective parties recieve from banks.Bring in the foreign banks and you will see a mass exodus from the fat 4. The Australian banks need to be broken.