Trending Financial News 7 October
More lenders cut home loan rates
More lenders are announcing rate cuts following the RBA’s October rate cut of 0.25 percentage points on Tuesday.
P&N Bank has lowered its mortgage rates by 0.16 percentage points.
RAMS, RACQ, Heritage Bank, Qudos Bank, AMP Bank, HSBC Australia, Macquarie Bank, Virgin Money, MyState, Bendigo Bank, Suncorp and ING have cut variable mortgage rates by 0.15 percentage points.
Newcastle Permanent has cut rates by 0.13 percentage points.
Bank of Queensland and Bank Australia have cut variable mortgage rates by 0.10 percentage points.
One bank has cut credit card and personal loan rates
Queensland based mutual, Heritage Bank, has announced rate cuts to personal loan and credit card rates following the RBA’s October rate cut of 0.25 percentage points.
Heritage is passing on the full 0.25 per cent to credit card rates and personal loan rates.
Heritage’s acting CEO Paul Williams told Mortgage Business that: “We’ve passed on as much of the RBA rate cut as we can.”
Auswide and FreedomLend pass on full 0.25% rate cut
Queensland based Auswide Bank and non-bank lender FreedomLend have both lowered variable mortgage rates by 0.25 percentage points.
The bank’s variable mortgage rates now start from 3.24 per cent.
Commonwealth Treasurer Josh Frydenberg said customers who are disappointed with their lender “should vote with their feet.”
“Some of the smaller lenders have actually passed on this rate cut,” said Mr Frydenberg, “people should shop around, get the best deal, but also make their displeasure known to their banks because the rate cuts should be passed on in full.”
Banks face anger over rate deals
The government is being urged to start a new inquiry into competition in the banking industry and the big banks. The chairman of the Australian Competition and Consumer Commission, Rod Sims wants an inquiry into competition in banking and says the big banks treat new customers better than loyal customers.
The gap between interest rates offered to new customers and the rates for existing customers are about 0.5 per cent, the AFR reports.
“Is the message the banks want to send that they are happy to dud their loyal customers?” asked Mr Sims.
Borrowers told – fight the Loyalty Tax
The treasurer Josh Frydenberg, Labor’s opposition treasury spokesperson Jim Chalmers, and the chairman of the government’s competition watchdog, the ACCC, Rod Sims have all criticised the big banks for failing to pass on RBA interest rate cuts in full.
Mr Sims said the longer a customer stays with a bank the less likely they are to be offered competitive rates. Mr Frydenberg said: “In banking, customers get penalised for their loyalty.”
“To win new business, banks will offer cheaper rates to new customers, leaving their existing customers in the cold.”
Jim Chalmers said Labor would look at options to boost competition.
Big four banks keep some of the RBA rate cut
Westpac, ANZ, CBA and NAB have all declined to pass through the total amount of the Reserve Bank’s October rate cut to their existing borrowers.
“Owner occupiers paying principal and interest on variable rate home loans is the number one market for most banks and home lenders,” said Vadim Taube, CEO of financial comparison site InfoChoice.
“If your lender hasn’t passed on the full RBA rate cut to you, you may like to listen to Treasurer Josh Frydenberg and think about voting with your feet.
“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.”