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All of the nation’s major banks have now made their move following this month’s 0.25 per cent cash rate cut, with not one choosing to pass the rate cut on in full.
Yesterday ANZ and Westpac followed CBA and reduced their standard variable home loan rates by 10 of the 25 basis points; both attributed funding pressures to their decisions.
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NAB meanwhile has refrained from passing on any of the cash rate reduction to borrowers, claiming its SVR is still lower than many.
John Bignell, founder of broking franchise The Mortgage Gallery, said the banks’ reactions to this month’s rate cut were not unexpected.
“The banks have been clear from the outset that should the RBA decide to reduce rates this month that little or none of the cut would be passed on,” he said.
Mr Bignell however pointedout that there may be positive ramifications for future bank decisions.
“It is my hope that through regaining some margin by not passing on rate cuts to customers this time around, future rate cuts can be again passed on in full. The result of this will be a driver for ongoing activity across a number of borrower segments,” he said.
Clawing back margins would also help ease banks’ cost pressures, he added, “which should hopefully translate into more investment placed in broker servicing – which remains a key industry issue”.
