Brokers share their views on the budget and cash rate

If correct, this will mean that the cash rate has remained at its record low level for 10 months in a row, since August 2016. Following the decision last month, the bank said it believed holding the rate at its current level would “be consistent with sustainable growth in the economy and achieving the [country’s] inflation target over time”.

As well as being asked about the cash rate, the HashChing survey also asked brokers about their thoughts on a range of topics, including the recently-announced bank levy and housing affordability measures (as outlined the federal budget).

The ‘big bank tax’, as it has been labelled, will apply to the five biggest banks from September 2017 and features a quarterly 0.015 per cent levy on licensed entity liabilities, including corporate bonds and certificates of deposit. 

Despite being told by the regulators to ensure that the levy does not impact home loan borrowers, the heads of the big four banks have warned that it is likely borrowers will be impacted by the new bank levy.

When asked whether they believed the levy will be passed on to customers of the ‘big five’ banks (the big four plus Macquarie), just over 89 per cent of brokers answered in the affirmative.

Around 62 per cent of respondents said that they did not believe the bank level will “help to level the playing field for smaller banks and non-bank lenders”, while nearly three-quarters (73 per cent) said they believed the small banks and lenders will increase the interest rates on their mortgages following the recent lowering of credit ratings by Standard & Poor’s (S&P).

Touching on the housing affordability measures announced in the budget (which some in the industry have said are “ineffective”), 40 per cent of brokers said they thought the measures will “never” make a “substantial difference” for first home buyers.

Following on from reports that some of the branches of major banks may be offering their customers lower rates than available to the broker channel, the survey asked brokers what the impact on their business would be if the big four banks undercut broker rates.

In response to this question, the vast majority of brokers (nearly 83 per cent) said that their business would be “significantly impacted” if this were to happen.

Speaking of the findings, HashChing’s chief operating officer, Siobhan Hayden, said: “Our research found that over 90 per cent of brokers are confident that the cash rate will remain unchanged in June.  

"However, the vast majority of brokers believe that the federal budget’s bank levy will be passed on to customers of the big five banks, and smaller lenders’ rates are likely to go up too, meaning it’s highly likely that there will be further out-of-cycle rate hikes across the board.”

[Related: Aggregator asks regulator to ‘watch’ big banks]