Smaller lenders lag on rate cuts
Credit unions, building societies and the smaller banks are procrastinating over passing on official rate cuts to their variable-rate borrowers, typically taking an extra ten days to move.
Unlike the major banks which are under the microscope, some of the smaller credit unions and building societies have the luxury of sitting back and waiting to see how much and when the major banks and the mortgage originators move before reducing their own rates.
Last week's quarter-point rate cut by the Reserve Bank saw the majors announce immediately they would cut home loan rates effective in a week or so. These cuts are now in place yet we are only now starting to hear from a raft of smaller institutions announcing cuts over the next couple of weeks.
See BankChoice's Summary table of variable rate changes
Read BankChoice's Industry Update for more on the different rate setting policies of lenders in today's banking market.