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ISCOVER
Staff Reporter
The lingering effects of the global financial crisis are costing the average Australian mortgage holder around $350 per month, according to new research.
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Smartline Personal Mortgage Advisers analysed the gap between the Reserve Bank of Australia's (RBA's) cash rate and the variable interest rate charged by the major banks – finding that the gap had increased by 1.5 per cent since 2007.
“Following virtually every RBA cash rate movement over the past four years, the lenders have kept a little bit for themselves,” Smartline’s executive director, Joe Sirianni, said.
“Five basis points here, ten basis points there – it all adds up. Back in early 2009 when we last saw a three per cent cash rate, borrowers were paying around 5.20 per cent for their variable mortgage – fast forward four years and they are now paying 5.70 per cent.”
Mr Sirianni conceded that most of the additional margin was being absorbed by higher funding costs.
“This is the hidden cost of the GFC and one that directly impacts on the hip pockets of every Australian with a home loan,” he said.
Mr Sirianni said that in the coming months, Australia’s banks could take the lead and drop interest rates independently of the RBA’s cash rate decisions.
“With international funding costs having eased, strong bank profits and increasing competition in the home loan marketplace, we may well see the banks taking the lead on bringing rates down.
“That could only be a positive for Australian mortgage holders.”
