Government tells borrowers – vote with your feet The treasurer Josh Frydenberg has again slammed banks for not passing on the full amount of the RBA’s October rate cut of 0.25 percentage points. “It’s very disappointing that the banks have chosen to go this way,” said Mr Frydenberg on Sky News, “The RBA has pointed to the reduced cost of funds to the banks and the importance of passing on these rate cuts.” “The only way banks will get the message is through the voices of their customers and through their customers voting with their feet. “So my message to them is to get the best possible deal and make your concerns directly known to your local bank.” Compare home loans from Australia’s banks, credit unions, building societies and non-bank lenders at InfoChoice. Lenders cut interest rates – but not by much Most banks and other lenders have followed the lead of the big four banks and not passed on the full 0.25 percentage points rate cut to their retail borrowers. Macquarie Bank and Suncorp, have announced cuts to their variable home loan rates of 0.15 per cent pa. WA’s P&N Bank has decreased its home lending rates by between 0.16 per cent pa and 0.25 per cent pa. HSBC announced cuts to variable home loan interest rates by between 0.15 per cent pa and 0.20 per cent pa. Borrowers are getting approved for bigger mortgages The ratio of housing debt to income rose to 140 per cent in Australia in the three months to June, the RBA reported. And home loan sales went up 5.1 per cent in July according to the ABS. Potential home buyers are getting approved for mortgages that are about 15 per cent higher than they were last year, according an experienced property professional. “This 15 per cent extra borrowing capacity will be completely consumed by the borrower,” Buyers agent Stuart Jones told the AFR, “That is going to parlay into 15 per cent price growth.” Financial counselling can help everyone There are 500 financial counsellors in Australia, funded by government and charities who provided face-to-face services to 125,000 people and spoke to 180,000 people on the Debt Helpline in 2018. Now a review of financial counselling has recommended that government force the big banks to assist with expansion of the financial counselling sector with a $20 million injection. The review found the services provided by counsellors was high quality. The Australian Banking Association said “banks support industry funding sourced from both the financial sector and other industries that may contribute to financial hardship”. The debt helpline is 1800 007 007.