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Within four hours of the RBA cutting the official cash rate, each of the big four had gone public with their response – following targeted insistence from Treasurer Josh Frydenberg that they pass the savings through to their borrowers in full.
“We strongly believe reducing rates is the right thing to do by our customers and reflects our focus on earning trust in the community and rewarding our loyal existing customers,” said NAB chief customer officer for consumer banking, Mike Baird.
Westpac took a different approach, reducing variable home loans for owner occupiers paying P&I by just 0.20% per annum, but by 0.35% for investor customers with interest only payments.
Additionally, Westpac announced a new first home buyer special for owner occupier P&I customers with a fixed rate of 3.49% for five years.
ANZ, the first major to release their response following the RBA’s decision, was the only bank to clearly defy Frydenberg’s urgings.
The major announced an 0.18% decrease across all variable interest rates for Australian home and residential investment loans – passing along less than three quarters of the RBA cash rate cut.
“In making this decision we have weighed up a number of factors, such as business performance, market conditions and the impact on our customers, including our depositors,” said ANZ group executive for Australia retail and commercial, Mark Hand.
“While we recognise some home loan customers will be disappointed, in making this decision we have needed to balance the increased cost in managing our business with our desire to provide customers with the most competitive lending and deposit rates possible,” he added.
Canstar analysis has shown that if lenders pass the rate cut on in full, someone with an average variable rate $400,000 home loan over 30 years would save $58 per month and over $21,000 in interest over the life of the loan.
