Who's cutting and who's holding off?
Peter White (pictured), managing director of the Finance and Brokers Association of Australia (FBAA), has called on all lenders to reduce their variable rates “immediately and in full” to reflect the Reserve Bank of Australia (RBA)’s 25-basis-point cast rate cut.
He has also urged borrowers to pressure their lenders to pass through the full cut or start looking elsewhere.
“Lenders often favour new borrowers at the expense of their existing customers which is wrong,” said White. “However borrowers have the power to act themselves, and if your lender refuses to reduce your rate by the full margin, you can consider other financing options.”
“A full reduction in the variable rate will also allow some who were not previously able to refinance (in mortgage prison) due to the serviceability buffer rate of three per cent, to finally see some relief,” White added.
Which lenders have taken heed?
Athena Home Loans touted itself as the “first and fastest” to pass the 25bps cut through to all variable-rate loans; the alternative lender was certainly quick out of the gate with its press release, which came in a mere two minutes after the RBA call.
“We’re banging the drum to encourage other lenders to move faster - these RBA cuts should benefit Aussies' pockets, not bank profits,” said Athena.
As for the majors, NAB intends to reduce variable rates by 0.25% from next Friday, 30 May. Commonwealth Bank will also wait until the 30th. ANZ and Westpac had yet to make an announcement at the time of writing.
Among the non-major banks, Suncorp Bank also intends to pass the cut through on 30 May.
AMP Bank will reduce rates across all variable rate home loans by 0.25% from 2 June while ING is holding off until 3 June. AMP Bank’s director, lending and everyday banking Michael Christofides, said: “We’re pleased to pass on this rate reduction to our customers, helping to ease some of the financial pressure many are feeling.
“We remain committed to supporting our customers through changing economic conditions, and we encourage anyone experiencing financial difficulty to reach out – our team is here to help.”
Non-bank lender Bluestone is passing on the 0.25% cut to new loans effective immediately and to eligible variable-rate customers from 11 June, while Pepper Money will be decreasing the variable interest rate for existing residential, commercial, construction and SMSF loans by 0.25% on 5 June.
Bluestone is happy to support customers and brokers in these challenging times by passing on the 0.25% rate cut," said Bluestone's chief commercial officer Tony MacRae. "This will play a small role in helping customers with cost-of-living pressures and assist customers looking to enter the market through greater affordability and improved borrowing capacity. We expect further rate cuts later in the year."
MPA will update this list as more information becomes available.
