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ISCOVER
Staff Reporter
As more lenders reduce the interest on their standard variable rates, one thing is becoming clear: Australia’s non-banks and credit unions are far more likely to pass on the full rate cut to borrowers.
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Yesterday, Gateway Credit Union announced it would pass on the full 25 basis point rate cut to borrowers, taking its standard variable rate to 6.19 per cent.
Gateway Credit Union chief executive Paul Thomas said the decision to pass on the cash rate cut on in full will give the average borrower an extra $48 a month to play with.
“Unlike most banks, our shareholders are also our customers and this means we must remain focused on people, not profits. As such, we think withholding cash rate cuts hurts the very people we should be focused on, our customers,” Mr Thomas said.
So far, none of the major lenders have passed on the full 25 basis points to borrowers, with NAB, CBA and Westpac passing on 20 basis points, 20 basis points and 18 basis points respectively.
Similarly, AMP failed to pass on the full rate cut, with the lender announcing just this morning that it would cut its standard variable rate by just 17 basis points – one of the smallest rate cuts so far.
Meanwhile, non-bank lenders Yellow Brick Road and Australian First Mortgage did not hesitate to pass on the full rate cut to borrowers.
