Most Australians mortgagors have not been passed on the full rate cuts by the four majors since 2011, new research by comparison site finder.com.au reveals.
The big four banks will each have held back an average of 0.37 percentage points of the Reserve Bank’s 2.50 percentage points of cash rate drops from their standard variable interest rates.
held back the most of the cuts since 2011 with 0.46 percentage points, followed by Commonwealth Bank and Westpac keeping 0.34 percentage points and ANZ
with 0.33 percentage points.
Money expert for finder.com.au, Michelle Hutchison said the banks’ decisions to keep rate cuts from customers will impact most households with a mortgage.
"The big four banks hold 84% of home loan market share of all banks monitored by the Australian Prudential Regulation Authority (APRA
),” she said.
“And it's estimated that 70% of all mortgage holders have a variable home loan, according to finder.com.au.”
With the value of home loans financed between the big four at $1.1 trillion as at December 2014, according to Hutchison,
Commonwealth bank holds the lion’s share with a home loan book worth over $354 billion.
“For a $300,000 home loan, borrowers could be missing out on $70 per month, $840 per year or over $25,000 over 30 years, based on the average 0.37 percentage points that the big four banks have kept from their customers.
“The big banks are making record profits from their customers because many borrowers are not bothering to compare their home loan to other lenders. While some prefer to pay more for to bank with the one organisation, it’s a hefty cost for a little convenience.”