Powered by MOMENTUM MEDIA
the adviser logo

Treasurer blasts big 4 for failing to pass on full cut

by Charbel Kadib4 minute read

josh frydenberg new ta josh frydenberg new ta

The banks have “a lot of explaining to do”, Treasurer Josh Frydenberg has said, after all four major banks failed to pass on the full 25 bps cut from the Reserve Bank. 

ANZ and Westpac yesterday announced cuts to their mortgage rates in response to the Reserve Bank of Australia’s (RBA) decision to cut the cash rate to 0.75 per cent.  

ANZ

ANZ has reduced its variable rates by between 14 bps and 25 bps, effective from 11 October.

Advertisement
Advertisement

ANZ’s standard variable rates (SVRs) for borrowers with principal and interest (P&I) terms will drop by 14 bps to 4.79 per cent for owner-occupiers.

SVRs for investors with interest-only (IO) terms will be cut by 25 bps to 5.74 per cent.

The bank also announced that it will cut two and three-year fixed rates (Breakfree Package) to 2.98 per cent for owner-occupier P&I borrowers and to 3.49 per cent for investor IO borrowers.

Following the announcement, ANZ group executive, Australia retail & commercial, Mark Hand said: “This was a considered decision balancing the needs of our customers in a low rate environment as well the performance of our business and our role in stimulating the economy.

“We were able to match the full rate reduction in July and the majority in June; however, the dynamics of record-low interest rates has resulted in a reduction in variable home lending rates of between 0.14 per cent and 0.25 per cent this time around.

“While we recognise many customers will use this as an opportunity to pay down their existing home loans faster, we hope this provides the economic stimulus the Reserve Bank is wanting to generate.”

Westpac

Meanwehile, Westpac has reduced its rates by 15 bps, with the changes to apply from 16 October across all of its owner-occupied and investment products for borrowers with both P&I and IO repayment terms.

Westpac’s SVRs for borrowers with P&I terms will fall to 4.83 per cent for owner-occupiers and 5.38 per cent for investors.

SVRs for borrowers with IO terms will fall to 5.42 per cent for owner-occupiers and 5.64 per cent for investors.

“In making the decision, we took into account the reduction of the official cash rate and the commercial pressures of the low interest rate environment,” David Lindberg, Westpac chief executive, consumer, said.

All four major banks have now dropped their rates following the RBA’s announcement, with the Commonwealth Bank of Australia and NAB cutting rates by between 13-25 bps and 15-30 bps, respectively. 

Treasurer slams big four

Commonwealth Treasurer Josh Frydenberg has criticised the big four for failing to pass on the full 25 bps reduction to their mortgage customers. 

“The banks have a lot of explaining to do,” Mr Frydenberg said. 

“This is very disappointing by the banks, and customers should vote with their feet.”

The Treasurer encouraged borrowers to consider switching to alternative lenders with lower mortgage rates. 

“Now, some of the smaller lenders have actually passed on this rate cut in [full],” he said. 

“People should shop around, get the best deal, but also make their displeasure known to their banks because the rate cuts should be passed on in full, and that would be a good thing for consumers."

[Related: Broking industry reacts to record-low cash rate]

Treasurer blasts big 4 for failing to pass on full cut
josh frydenberg new ta
TheAdviser logo
josh frydenberg new ta

Charbel Kadib

Charbel Kadib

AUTHOR

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

MORE FROM THE ADVISER

Jane Counsel

Men’s doubts around female brokers’ experience and knowledge...

Jane Counsel, research lead on the Mortgage and Finance Brokers Association of Australia’s (MFAA) Opportunities for...

READ MORE
depsoit assure grant bailey

Grant Bailey joins Deposit Assure

Grant Bailey – who was previously the general manager of Deposit Power – has taken up a new role at Deposit...

READ MORE
stressed woman ta

How will Labor’s policies tackle housing affordability?

On Monday (23 May) Anthony Albanese was sworn in as the 31st Prime Minister of Australia, alongside the first senior...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more