This week in banking - The RBA rate cut edition
In our weekly banking recap, we look at the biggest news from across the Australian banking landscape.
RBA finally cuts the cash rate
The big news this week was the decision by the RBA to cut the cash rate, dropping it to a record low 1.25%. While the board had kept the cash rate steady for 30 straight meetings, weaker than expected inflation figures and dipping employment levels forced the board to change their tune.
"Today's decision to lower the cash rate will help make further inroads into the spare capacity in the economy,” said RBA Governor Philip Lowe. “It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target."
Big banks falter, delay cuts
Within hours of the decision, we had received word of all four major banks’ plans. Both the Commonwealth Bank and NAB announced they would pass on the full cut to their customers, while ANZ and Westpac said they will only be passing on 0.18% and 0.20%, respectively.
While all four banks have caught a bit of flak for delaying effective dates, ANZ’s decision in particular drew quite a bit of backlash, with Philip Lowe all but scolding the big bank for failing to pass on the full rate cut to its customers. He’s since urged Australians to shop around and consider switching if their banks hold back some of the cut for themselves.
Smaller lenders come out on top
While the big banks delayed the date at which their cuts will take effect, smaller lenders are moving quickly to attract new borrowers. Athena, Homestar and Reduce Home Loans all dropped variable rates by 0.25% on the day of the RBA’s decision, offering some of the lowest rates in our database. And unlike the Big 4, customers won’t have to wait before those changes kick in.
Challenger banks rising up to the occasion
At the time of writing, more banks and lenders have reduced variable rates by the full 0.25% than haven’t. While the smaller lenders mentioned above are leading the pack, others like ING and Bank of Queensland have also hastened to pass on the full cut. We’ll be keeping track of all the decisions as they come in on our Naughty or Nice table, so check in to see where your bank falls.
Mozo Experts Choice Awards reveal top NBN plans
In non-RBA news, this week we unveiled the winners of our NBN Mozo Experts Choice Awards. We looked at 59 providers and judged their offerings according to speed, price, flexibility and data allowances. Despite tough competition, Belong was crowned our provider of the year, having racked up seven awards across its three plans.
Victorian households can now save hundreds on energy bills
Starting July 1, folks in Victoria can expect to save hundreds on their annual energy bills, thanks to the Andrews government’s new Victorian Default Offer. This will allow Victorian households and small businesses to access lower prices from their energy provider, potentially saving them between $310 to $450 per year.
“This is one of the biggest reforms to the energy sector in over a decade – and it’s not just available to people currently on standing offers; anyone can ask for the Victorian default offer,” said Energy Minister, Lily D’Ambrosio.
And if all the talk of reduced rates this week has you thinking about taking out a home loan, we’ve compiled some great picks below. For a look at even more, be sure to check out our variable rate home loans comparison page.