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MyState announces 'equitable' rate cut

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MyState announces 'equitable' rate cut

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Reporter 2 minute read

The non-major lender has opted to protect its “much larger” deposit customer base by choosing not to pass on the full 25bps cut to the official cash rate. 

In response to the Reserve Bank’s monetary policy adjustment, MyState Bank has reduced its standard variable mortgage rates by 20bps, effective from 27 June for both new and existing mortgage customers.

The lender stated that most of its mortgage customers will receive the 20bps cut, with the exception of some borrowers that hold low-rate basic home loan accounts, who may receive a rate cut of 10bps.

MyState claimed that its decision was influenced by its intention to “distribute the rate changes as equitably as possible”, across both its lending customers and “much larger” number of deposit customers.

The non-major’s general manager of banking, Tony MacRae, added that MyState’s funding costs were “increasingly driven by a combination of market forces, rather than just the RBA cash rate”.

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He continued: “A number of considerations weighed into our decision, including trying to buffer our deposits and savings customers – particularly retirees or customers saving for their first home – from the impact of the cut.

“Providing competitive rates for our deposit customers was a significant consideration in our decision.”

MyState joins the likes of ANZ, Westpac and its subsidiaries (Bank of Melbourne, BankSA and St George), Bendigo and Adelaide Bank, Heritage Bank, Suncorp, HSBC, Virgin Money and KeyStart Home Loans, in opting not to pass on the full 25bps cut.

RBA governor Philip Lowe and Treasurer Josh Frydenberg publicly called on lenders to pass the full rate cut to mortgage customers following the central bank’s announcement.

Mr Lowe stated that, in the past, the RBA has understood the circumstances dissuading lenders from moving in tandem with the RBA, but said that current circumstances warrant a full cut.  

The governor made reference to falling wholesale funding costs, which, following a spike in 2018, prompted lenders to lift variable rates out of cycle.

However, most lenders, including the Commonwealth Bank and NAB, passed on the full 25bps cut.

[Related: High-LVR lender falls short of full 25bps cut]

MyState announces 'equitable' rate cut
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