Lenders must pass on full interest rate cuts: FBAA

by Julia Corderoy20 May 2015
The FBAA has backed the call for all lenders to pass down the full interest rate cut to customers.

Since the RBA’s move to slash the official cash rate to a record 2% a fortnight ago, several lenders are still to pass on the savings, including three of the four major banks.

ANZ was the only major to pass the full interest rate reduction onto customers, announcing it would drop its standard variable home loan rate by 25 basis points. Westpac announced on a 22 basis point cut, whilst both Commonwealth Bank and NAB only passed on a 20 basis point cut.

FBAA chief executive Peter White says lenders should not pick and choose when they hand down the cut.

“Banks are always quick to pass on interest rate rises, but when it comes to cuts, it’s hardly ever immediate,” he said.

“In many situations, we also see lenders holding on to the interest rate profit to prop-up other non-profitable areas. Why should borrowers have to pay for the bank’s shortcomings?”

White says he will be talking to media across Australia this week, recommending that customers whose bank has not passed on the full cut to consult their local finance broker who can provide other options.