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ISCOVER
Jessica Darnbrough
One week after the Reserve Bank announced a 25 basis points cut to the cash rate the majors have so far fallen short of Australia’s smaller lenders.
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Three of the four major banks have dropped their standard variable rates between 18 and 20 basis points, while ANZ will reveal its position this Friday.
Of the majors to show their hand so far NAB offers the lowest variable rate at 6.58 per cent, followed by CBA at 6.60 per cent. Quite a way behind is Westpac, who currently offers a standard variable rate of 6.71 per cent.
ANZ’s standard variable rate currently sits at 6.80 per cent, with an announcement due this Friday.
The majors have been at pains to persuade brokers that the cash rate is no longer relevant when it comes to pricing variable rates, however it is still seen as the benchmark by many borrowers.
According to RateCity, 13 lenders have now cut their standard variable rates following the Reserve Bank’s announcement.
“Out of the 13 lenders that have so far announced rate drops, only four passed on the full 25 basis point cut to their standard variable rates. The movements were between 15 and 25 basis points,” RateCity spokesperson Michelle Hutchinson said.
The decision of several lenders to withhold some of the rate cut has raised the ire of some brokers who commented on theadviser.com.au, labelling the announcements “greedy”.
FMS described CBA and NAB’s decision to hold back the full rate cut as “shameful”.
“Out of Australia's major banks, National Australia Bank and the Commonwealth Bank have reduced their interest rates by only 20 basis points, putting the profits before their customers, despite warnings from most economists and politicians.
“Shame on you NAB & Commonwealth.”
Michael Brickell however focused on praising the lenders that had passed on the full 25 basis points to their borrowers.
“How can a non-major pass on full rate and be cheaper than the major four,” he asked.
“Good on you ING DIRECT for setting the standard.”
