October RBA cut final straw for big four customers, finds latest Mozo research

Just a few short weeks after the Reserve Bank of Australia cut the official cash rate by 0.25%, new research gathered by Mozo has revealed that a huge 70% of Aussies no longer trust the big four banks.

Half of that figure cited the big four’s failure to pass on the full October RBA cut to their customers as the reason for their concerns, with the average big four bank passing on just 0.14% of the cut to its home loans. That’s a significant 11% less than the full cut and 1% less than the average 15% home loan rate cut passed on by all Aussie home loan lenders in the Mozo database*.

By choosing not to pass on full RBA rate cuts, the big four banks have shockingly pocketed $4.7 billion in additional revenue since 2016. 

Aussies borrowers ready to walk away from major banks

Despite the fact that the major banks still collectively hold 75% of residential mortgages across Australia, Mozo’s research has shown that the perception of the big four is changing in the court of public opinion.

As Mozo Director Kirsty Lamont said, “Australians are making it crystal clear that they are not impressed with the big banks, with 62% saying that the big four are putting profits before customers.”

RELATED ARTICLE: Big banks have pocketed an extra $4.7 billion by not passing on full cuts

1 in 4 of the 1,036 big bank customers who took part in Mozo’s survey, even revealed that they had already started switching away from or fully intended to leave their bank following the October RBA cut. In context, that could be a pretty hefty 4.9 million Australians who are thinking of moving on to greener pastures.

Borrowers turning to online banks for better value

So where are all these borrowers going? Does the term online lender sound familiar? Well that’s where half of Aussies who took part in Mozo’s survey, said they would consider going after the rate cut. And while some listed security, convenience and lack of knowledge of other lenders as their reason for failing to make the change just yet, lower interest rates and lower fees were recognised as a big plus for opting to go with an online lender.

RELATED ARTICLE: Meet the online lenders saving Aussies millions

As Lamont put it, “an online lender can easily save you tens of thousands of dollars over the course of your loan as well as offering the same level of security as any major bank.”

In fact, we figured out that the average Aussie could save a staggering $75,000 on a $300k owner-occupier principal and interest loan over a 30 year period, by choosing to opt for an online home loan lender with a competitive rate rather than a home loan with one of the big four. 

“Only 19% of Australians believe that the big banks are doing what is necessary to stay afloat in the wake of the rate cuts, leaving a massive 80% unimpressed with big bank behaviour. The writing is on the wall for many borrowers and now is the time to find the most competitive rate on the market and reap the rewards,” concluded Lamont.

How can you find a more competitive home loan?

If you’re at a loss for where to start, here are a few things you can do:

  • Take a look at Mozo’s home loans comparison page. Interest rates on this page are updated daily and you can even enter the amount you want to borrow and the loan term, to see what home loans might best suit you.
  • Use Mozo’s switch and save calculator to see how much you could be saving by switching your current home loan.
  • Show your current lender your findings and push for a lower interest rate on your current home loan.
  • If your current lender isn’t willing to budge, or their offer doesn’t excite you that much, then think about switching. Just remember to be wary of honeymoon rates, one-off deals and any fees that might be involved with breaking from your current home loan.

Or if you want a quick scroll of what else is out there, take a look at the home loan options below with competitive interest rates.

Compare home loan deals - rates updated daily

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Mozo Experts Choice 2021
    Smart Booster Home Loan

    1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a.variable for 12 months and then 2.48% p.a. variable
    2.47% p.a.

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.

    Go to site
    Details
  • placeholder
    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.75% p.a.
    fixed 3 years
    2.22% p.a.

    $0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

    Go to site
    Details
  • placeholder
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    2.09% p.a.
    fixed 3 years
    2.43% p.a.

    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2021
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.19% p.a. variable
    2.19% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.

    Go to site
    Details
  • placeholder
    Fixed Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.89% p.a.
    fixed 2 years
    2.15% p.a.

    Award-winning low rate home loan that could save you thousands. No application or ongoing fees, fee-free redraws, unlimited additional repayments and an optional offset account for $10/month. Minimum 10% deposit. Winner of Mozo’s Experts Choice Award for Online Home Lender of the Year 2021.^

    Go to site
    Details

*Average correct as of Monday 21st October, 2019.

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

**Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loans Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

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