Not one of the big four banks has opted to pass November’s cash rate cut through to their variable customers, keeping the savings out of reach for millions of mortgage holders and earning the ire of some loud voices within the industry.
Following Tuesday’s announcement, CBA, Westpac, NAB and ANZ were slow to respond and, when they finally did, they elected to adjust only their fixed rates.
The majority of banks have now failed to pass on the last two RBA rate reductions, according to RateCity.com.au research director Sally Tindall, meaning most existing variable rate customers have missed out on a total rate cut of 0.5% this year.
“This latest round of so called ‘cuts’ from the banks confirms loyalty is dead and buried," she added.
“Governor Lowe had said a rate reduction would help address problem loans, but the banks’ refusal to pass on these cuts means people in financial strife aren’t likely to be getting any rate relief.
“Instead they’re stuck in mortgage prison clocking up an almighty interest bill.”
FBAA managing director Peter White AM has called the big four banks’ refusal to pass the recent interest rate cut through “unconscionable”, particularly given the current COVID climate.
White said that after having spent 40 years in the financial services industry, he should no longer be surprised at the way banks priortise their profits, but yet he has still found this latest injustice “beyond belief”.
“Have they learnt nothing from the royal commission?” he asked.
“This is the opportunity for the banks to build trust and send a message that they can put people above profits. I challenge them to do just that.”
White has expressed hope consumers continue to realise the big four banks are not the only options out there.
“Other lenders are passing the reduction on, and borrowers should talk to their broker to consider what is best for their situation,” he said.
One such lender is ME Bank, which announced it will pass on the full RBA cash rate cut of 0.15% p.a. to all its existing variable rate home loan customers, effective 26 November 2020.
“We have been speaking to thousands of our home loan customers over the past six months, many of whom have shared their concerns about the financial impact COVID-19 is having on households,” said ME CEO Adam Crane.
“This decision will help many of those households through what is a difficult financial period.”
