RBA says bank rates are where they should be
Steven Münchenberg, chief executive of the Australian Bankers Association says the Reserve Bank has “again confirmed” that Australian households and borrowers are not paying more for their mortgages and business loans, even when banks don’t pass on RBA cash rate cuts in full.
“Mortgage rates today are broadly where they would be, regardless of whether banks pass on rate cuts in full or not.”
Deputy governor of the RBA, Philip Lowe, pointed out that banks’ funding costs, and hence mortgage rates, have risen relative to the cash rate.
“As we have noted many times, the board of the RBA has taken account of this in its monthly policy decisions. As a result, the cash rate today is around 1.5 percentage points lower than it otherwise would have been. The fact that the bank has offset the effect of higher funding costs on lending rates means that the normal level of the cash rate is lower than it otherwise would have been.”
Source: Broker News