Last week Australia’s big four banks were quick off the mark announcing they would be passing on the full Reserve Bank rate decrease (bar NAB, who only dropped its rate by .20%). This was welcome news for most homeowners and some good PR for the banks, particularly the Commonwealth Bank, which seemed to have taken heed from the massive fallout from its supersized interest rate rise last November.The reality is that the banks’ home loan customers will not see their interest rates drop until an average nine days after the official rate cut. The Commonwealth Bank has passed on its rate cut in record speed of just three days but its peers are not so generous. NAB took six days to pass on the cut, while new rates for ANZ and Westpaccustomers only come into effect from 14 November, almost two weeks after the Reserve Bank announcement.Analysis by Mozo’s rate chasers reveals that if the Big 4 had passed on their home loan rate cuts two days after the announcement (which they managed to do in May 2010 when passing on a rate rise) borrowers would collectively pay $37.8 million less interest.It does seem rather odd that at a time when the Occupy protest movement is front page news championing for social and economic equality, Australia’s big banks would be so blatant about gauging their customers.Maybe there is a plausible explanation? Can anyone answer the $37.8 million question? Why does it take longer for banks to pass on rates cuts than sting customers with rate rises?
The $37.8 million question for Australia’s big banks was last modified: June 29, 2015 by