If you’ve checked out this morning’s Daily Telegraph or Herald Sun, you’d noticed their headlines will scream things such as, “Banks ruining Christmas”. They all have a reason why. As discussed on our website on Monday, earlier this week the Reserve Bank announced a 0.25% interest rate cut.
While many smaller credit unions and banks are passing on the rate cuts, the big four banks - Commonwealth Bank, ANZ, NAB and Westpac aren’t willing to pass on these new cuts to their customer. Analyst estimates suggest that for every day the Major Banks do not pass on the 0.25% rate cut, they save $4M per day.
Federal Treasurer Wayne Swan is unimpressed, calling on the four banks to pass on the interest cuts to consumers. “In order for this to work, the big four banks need to come to the party to have the desired effect”.
It’s unfortunate these new rate cuts haven’t been passed on to consumers. Then again, as mentioned in today’s The Australian, George Megalonis believes borrowers have been short-changed for far too long. He commented that apart from the small window of hope back in the mid 1990s in regards to the robust competition of home loans - which was a win-win situation for home buyers, the banks haven’t always passed on these cuts.
So guys, if you’re looking to purchase your first home, it’s best to shop around for the best deals if the big four cats aren’t willing to pass on the new interest cuts.
Update 9.39 PM
All four banks are going to pass on rate cuts, stating the fact that they wanted to help customers during the busy Christmas period. ANZ was the first to announce its change, saying it will pass its 25 basis point reduction on December 16, taking its standard variable rate to 7.3%. Similarly, NAB announced its standard home loan variable rate to 7.22% which will be effective on December 16 as well.