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Jessica Darnbrough
Despite a recent drop in funding costs, a majority of mortgage brokers are convinced Australia’s lenders will leave their standard variable rates untouched.
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According to media reports, the cost of funds has fallen in recent months, leading many industry commentators to predict “independent” rate movements by the majors.
Last month, Loan Market Group’s Mark De Martino told The Adviser that the recent drop in funding costs would ultimately “put pressure” on Australia’s lenders to pass on any Reserve Bank cash rate cuts in full.
“I have spoken to a few lenders of late and they have intimated that their costs of funds have dropped,” he said.
“As a result, I think we should expect to see most if not all lenders pass on any rate cuts in full to borrowers.”
But while Mr Martino believes the industry could see ‘out of cycle’ rate movements from the majors, it seems most brokers do not agree.
According to a recent straw poll conducted by The Adviser, 68.6 per cent of brokers believe the majors will not cut their rates independently of the Reserve Bank this year.
Of the 226 respondents, 22.6 per cent said they did expect the majors to move out of cycle with the RBA, while the rest remained “unsure”.
