Home owners short changed $2.4 billion by major banks.
Article by Kevin Boyle
There has been much criticism of Australia's banks who have failed to pass on full interest rate cuts, with home loan customers being left short an average 39 basis points since the Reserve Bank began cutting rates back in November.
The Australian Institute claim that the Big Four amassed a total of 2.4 billion off of mortgage holders last year and that for every dollar spent in Australia, 2.3 cents ends up as bank profit. This puts the Big Four amongst the 10 most profitable banks in the world with over $25 billion in profits. But with the latest speculation by JP Morgan and Goldman Sach's that Australians will not see the Reserve Bank make any further cuts until as far away as May, Australia's major banks could soon be making moves that will drastically improve their popularity.
The major banks have reasoned that the cost of funding from global markets is a factor effecting their rate cut decisions. Now as the price of that funding begins to ease, it's rumoured that some major banks may begin self initiated rate cuts through the year.
"There is not enough evidence yet for the banks to reduce rates away from official moves but if the diminshed funding pressures are sustained that may occur in the next 3-6 months," Nomura banking analyst Victor German said.
Many home owners are waiting to see the results of tomorrow's RBA decision, astute Aussies frustrated by their banks not passing on full rate cuts are taking it upon themselves to initiate interest rate cuts on their own, by taking a home loan comparison and switching to a bank with a better interest rates.
Have a question about home loans? Ask the gurus at Mozo Answers.