Westpac has dismissed a Fairfax report insinuating that the bank was holding out on borrowers following last year’s rate cuts.
Fairfax reported that the bank had lagged in adjusting customers’ repayments following rate cuts in November and December, and that many customers would not see their repayments altered until March. But Westpac spokesperson Supreet Gosal told Australian Broker the Fairfax report was misleading.
“It implied that we don’t pass on interest rate reductions, which is not true. We’re very clear about that and advertise the effective date through our press releases and through our social media channels,” she said.
The delay in adjusting repayments, Gosal said, was not uncommon in the mortgage market.
“This isn’t just Westpac. It's standard practice across banking that banks will adjust repayment rates periodically. In fact, Westpac adjust more frequently than others in the industry. Westpac are the only ones who adjust four times a year,” she said.
The delay in adjustments can also prove a boon to borrowers, she claimed.
“There’s the same period between the effective date and the notification when interest rates go up, and when interest rates go down the period means people are paying off their mortgage a bit faster. We’re very open and transparent on this,” she said.
Gosal reiterated that the delay before the change in repayments would not disadvantage borrowers, or allow the bank to raise funds from higher repayments.
“If borrowers are in a scenario where they want to bring the repayment down they simply need to contact the bank over the phone or through online banking. Some customers may not elect to bring their repayments down so they have that buffer and pay off a little bit more,” she said.
Ultimately, Gosal said Fairfax was mistaken in implying the period between rate changes and changes to repayments amounted to any kind of cash grab by the bank.
“There is no benefit for Westpac. Moreover, it works both ways, so borrowers are offered an adjustment period when rates rise,” she said.