Trending Financial News 3 October

Scott Morrison says banks are ‘profiteering’

The Prime Minister Scott Morrison has slammed the big four banks for not passing on the RBA’s October rate cut in full to retail home loan borrowers. CBA, NAB, Westpac and ANZ have announced rate cuts of between 0.13% and 0.15% following the RBA’s 0.25% rate cut on Tuesday.

“They never learn, they honestly never learn and it’s disappointing,” said Mr Morrison.

“All mortgage holders have a reason to be disappointed in the banks basically profiteering.”

All four big banks retain part of the RBA rate cut

Commonwealth Bank, Westpac, ANZ and NAB have defied the treasurer Josh Frydenberg and NOT passed through the entire 0.25% RBA rate cut to variable rate owner-occupier home loan borrowers paying principal and interest. While many lenders have announced 0.25% rate cuts (and even more) for investors, fixed rate and interest-only borrowers, the big banks have not passed on the full RBA rate cut to owner-occupiers paying principal and interest on variable rate loans.

ANZ Bank has cut variable home loan rates (for owner occupiers paying principal and interest) by 0.14 percentage points.

Westpac has cut variable rates for owner occupiers paying principal and interest by 0.15 percentage points.

NAB and CBA announced rate cuts of 0.15 percentage points and 0.13 percentage points respectively for owner occupiers paying principal and interest on Tuesday.

One lender has cut rates by 0.50%

The biggest rate cut so far in October for owner occupiers paying principal and interest on variable rate loans is from G&C Mutual Bank. G&C cut 0.50 percentage points from their variable rate first home-owner loan to 2.79 per cent pa.

“If your lender hasn’t passed on the full RBA rate cut to you, you may like to listen to the treasurer Josh Frydenberg and think about voting with your feet,” said Vadim Taube, CEO of leading Australian financial comparison site, InfoChoice.com.au.

“There are plenty of lenders who are passing on the full rate cut to customers and switching loans is getting easier and cheaper all the time.

“More lenders are going completely online so you can compare and switch lenders on your lounge at home.”

Frydenberg tells banks to please explain

The treasurer Josh Frydenberg yesterday said the major banks should follow small lenders such as Athena Home Loans that have delivered the full benefit of the 0.25 per cent official RBA rate cut to variable rate home loan borrowers.

On Channel Nine, Frydenberg called on borrowers to shop around for the best mortgage deal.

“Well, the banks have a lot of explaining to do,” said Mr Frydenberg.

“This is very disappointing by the banks and customers should vote with their feet.

“Some of the smaller lenders have actually passed on this rate cut in full …  so people should shop around, get the best deal, but also make their displeasure known to their banks.”

Compare home loans from Australia’s banks, credit unions, building societies and non-bank lenders at InfoChoice.

Westpac criticised for holding back rate cuts

Westpac and ANZ Bank yesterday announced they would transmit rate cuts of 0.15 and 0.14% through to retail borrowers, in defiance of public calls from federal treasurer Josh Frydenberg to deliver the full benefit of the RBA’s 0.25% rate cut.
 
Westpac, in particular, has been heavily criticised for passing on aggregate cuts of only 0.55 per cent  – the least of the major banks – since the RBA began reducing the cash rate in June (by a total of 0.75 per cent).

Westpac’s net interest margin (the difference between lending and savings rates) fell by 0.11 basis points in the March half, reported BankingDay.com. Customer compensation costs underpinned a 24 per cent dive in net profit to A$3.17 billion.

Kogan Money Black Card launched

Online retailer Kogan has launched a new credit card, the Kogan Money Black Card, offering no annual fees, uncapped rewards and member benefits. The card, issued by Citibank, has a purchase rate of 20.99 per cent, up to 55 days interest free and a cash advance rate of 21.74 per cent.

Currently the Kogan card is offering a $300 reward when cardholders spend $3000 within the first 90 days of approval. There is a zero rate balance transfer offer for 12 months. Rewards points accumulate at a rate of one point per dollar spent on general purchases and two points per dollar when purchasing specified products on Kogan.com.

Compare credit cards from Australia’s banks, credit unions and other card issuers at InfoChoice.

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