Lenders quicker to pass on rate cuts

Australia’s lenders were notably quicker in passing on any rate cuts to borrowers this month.

In the two days following the Reserve Bank's monetary policy announcement, 13 lenders reduced their standard variable interest rates. In October just four lenders changed their rates in the two days following the Bank's cut to the cash rate.

The majority of lenders continued the trend of not passing on the full rate cut but some lenders passed on the whole 25 basis points: ING Direct, MyRate and Yellow Brick Road.

“Because of the trend for lenders to not pass on the cash rate cuts in full, it’s more important for borrowers to look at the actual interest rates they are paying, rather than the discount they receive,” said an analyst.

Source: The Adviser