October RBA cut: Which banks have cut home loan rates already?
It’s been two days since the Reserve Bank board made the call to lower the official cash rate from 1.00% to 0.75% - an historically low rate in Australia.
Since then we’ve seen a trickle, rather than a stream, of banks and other home loan lenders cross the finish line by releasing details of their home loan rate cuts in response to the RBA’s decision.
Of the 80 plus mortgage lenders being tracked in the Mozo database, 15 have either cut rates already or announced that they will be cutting rates in the near future (at the time of writing).
So which banks have got in early, which lenders are sitting on their hands and what kind of cuts have we already seen? Here’s what we know so far:
Online lenders impress again
If one theme has prevailed since the RBA’s first rate cut of 2019 back in June, it’s been the size of home loan cuts from many online lenders and the speed with which they’ve delivered them.
Athena and Homestar raced out of the blocks following Tuesday’s RBA announcement - both delivering full 0.25% cuts to their respective variable rate home loans before the ink on RBA Governor Philip Lowe’s monetary policy statement was dry.
Fellow online lender UBank wasn’t far behind after announcing a 0.25% rate cut of its own across a number of variable rate offers.
That means that Athena, Homestar and UBank are now part of a very small group of lenders that have passed each of the RBA’s June, July and October interest rate cuts on in full.
Big banks cop a hiding
It’s safe to say that the majority of pundits would have bet against the big banks passing on Tuesday’s rate cut in full, and they weren’t wrong, with ANZ (0.14%), Commonwealth Bank (0.13%), NAB (0.15%) and Westpac (0.15%) all making cuts well below the full 0.25% mark.
And the failure of the majors to pass on the full cut to their variable home loan customers did not escape attention, with Federal Treasurer, Josh Frydenburg, taking them to task on Wednesday morning.
"The Reserve Bank itself has pointed to the lower borrowing costs for the banks and their expectation that these interest rate cuts are passed on. It's not just the Government that they are going against here, they are also going against the advice of The Reserve Bank," he said in an interview on Channel Nine’s Today Show.
"People should shop around to get the best deal and make their displeasure known to their banks. The rate cut should be passed on in full, that would be a good thing for consumers."
According to Mozo research, the big four have amassed roughly $167 million per month in additional revenue since 2016 by holding back portions of official rate cuts. That’s over $4.5 billion in total over the period.
Which other banks have cut home loan rates?
A handful of other lenders have joined the online players and big banks in announcing variable rate home loan cuts since Tuesday’s RBA decision, so this is how they've fared over the three most recent cuts:
Full 0.25% cut (October)
|June 2019||July 2019||October 2019|
|June 2019||July 2019||October 2019|
|Bank of Melbourne||-0.20%||-0.20%||-0.15%|
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