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Bank cuts could be on the way, in spite of RBA

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Australian Broker | 06 Feb 2013, 08:15 AM Agree 0
Banks have been slammed for out-of-cycle rate hikes, but their next out-of-cycle moves could have borrowers applauding
  • Country Broker | 06 Feb 2013, 09:57 AM Agree 0
    Great to see speculation in the market place , we will see what the big 4 do , its all about market share, cost of funds and most of all return to shareholdersb !!
  • Scopher | 06 Feb 2013, 09:59 AM Agree 0
    Don't hold your breath folks, our big banks have never been known for their generosity.
  • Incognito | 06 Feb 2013, 10:01 AM Agree 0
    I can sense this already in some of the little offerings coming from banks and non banks lately.

    Mortgage Ezy for example.

    I agree that this may well happen.
  • oldBroker | 06 Feb 2013, 10:02 AM Agree 0
    Why on earth would a lender do this? Certainly any business is free to reduce prices to remain competitive, but why would a business reduce its prices because it's costs-of-doing-business are lower? (as long as they are still competitive of course). A penny saved is a penny earned.
  • Chris C | 06 Feb 2013, 10:36 AM Agree 0
    If the majors decide to pass on rate cuts against the RBA they are only passing on what they did not in the past when they didn't have to. Now they have had their worst credit year, they have to up the anti with compeitition again that has been lacking in the last 5 years so we should see rate cuts from the majors now if they want to grow their assets, their loan books.
  • Jason | 06 Feb 2013, 11:03 AM Agree 0
    There are 2 sides to this equation - the SVR advertised by lenders and then there is the amount of the "discount" they provide below the SVR.

    From what I am seeing the "discount" is sometimes displayed transparently for all to see while on other occasions it is an "under the counter" offer.

    If I remember rightly it was the discounting war some 5yrs ago that led some banks to start reducing commissions.

    So we need to be careful what we wish for in respect to the net rate payable by the borrower - it needs to be sustainable for all parties involved (lender,borrower & broker)regardless of what the RBA does or doesnt do with the official cash rate
  • Canberra Broker | 06 Feb 2013, 12:58 PM Agree 0
    Institutions like Macquarie Bank have taken the opportunity, and brokers should be presenting the second teir lenders as the best options at present.
  • Positive Broker | 08 Feb 2013, 08:52 AM Agree 0
    Jason has hit the nail on the head. Pressure on banks to reduce margins places pressure on brokers to reduce margins. And we all know brokers could not reduce margins much at all before the business is not viable.
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