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Mark Bouris, chairman and co-founder of Yellow Brick Road, is calling on the federal government to track movements in bank wholesale funding costs.
According to a report in today’s The Australian, Mr Bouris said the initiative would allow home buyers to predict rate movements, given that banks are now known to move rates independently of the RBA.
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“For 20 years there was a connection between retail interest rates and the official cash rate but that’s now gone, and as consumers we don’t know what the benchmark is anymore,” he told the daily.
“We should have a benchmark rate for the cost of wholesale funds. That way, if the benchmark rate is 7 per cent, for example, and my variable rate is 6.5 per cent , then I should start thinking about fixing, because I could soon be paying 9 per cent if you allow a 2 per cent margin over costs.”
Mr Bouris comments come as the big four banks continue to stay mum on whether or not they will pass the RBA’s 25 basis point increase onto their consumers.
