The Finance Brokers Association of Australia (FBAA) is putting the pressure on the major banks to pass the cash rate cut on in full, after all four major banks kept at least 11 basis points to themselves.
Yesterday the Reserve Bank of Australia (RBA) cut the official cash rate by a further 25 basis points to a historic low of 1.5%. However, the biggest standard variable rate cut announced by the major banks was 14 basis points, being Westpac.
Peter White from the FBAA said he was bitterly disappointing that all of the majors failed to fully pass on the cut of 25 basis points.
“Banks must protect shareholders but they also must look after their customers. It was disheartening to find the CBA and NAB not passing on the full reduction which most banks passed on during the last official rate reduction in May,” he said.
White also questioned the decision to start the new rates up to almost three weeks after the RBA announced the cut. ANZ announced its interest rate reductions will come into effect Friday 12 August, whilst CBA and NAB both announced their reductions won’t come into effect until Friday 19 August.
“When rates rise the lenders lift their variable rates immediately! Again it is the customer who is being treated poorly,” White said.
The FBAA is also urging customers who already have loans locked in to think carefully about whether to refinance, and perhaps move to a variable loan.
“My advice would be to have a mixture of both fixed and variable, but be aware that rates will inevitably climb, perhaps sooner rather than later,” White said.