Investors are the winners, as owner-occupiers miss out on full rate cuts

The big four banks have all only passed on part of the RBA’s 25 basis point rate cut, keeping a large chunk for themselves.

They’ve defied treasurer Josh Frydenberg’s call for them to pass on the full cut, with further cuts expected in the not too distant future.

CBA and NAB were the first to cut their rates on Tuesday, with ANZ and then Westpac following yesterday.

Investors were the big winners. Investors with interest only investor mortgage’s saw their rates get cut the full 25 basis points by ANZ, CBA and NAB. Westpac were the only ones not to pass fully.

The labour market performance was one of the key statistics that drove the RBA to cut rates. Source: RBA

Owner occupiers paying principal and interest on variable rate home loans is the number one market for most banks and home lenders.

The number of fixed home loans is down over 50% since August 2017, a drop from 11,373 to 5,416.

According to Finder.com.au, there has been a near 400% spike in visitors to their pages about breaking from fixed loans.

Following October’s RBA rate cut, there was a 69% spike in visitors across all Finder home loan pages, including a 296% jump in views of the variable home loans page, week-on-week.

“Based on all the economic indicators the RBA reviews – employment, inflation, housing, wages – we are likely to be in a low-rate environment for the foreseeable future.

“Unless we see huge drops in fixed loan rates, variable loans will likely stay in vogue,” Cooke said.

The lowest current fixed home loan rate sits at 2.79% (Mortgage House and Greater Bank) which is higher than the lowest variable home loan rate on the market at 2.69% (Reduce Home Loans).

Far and away the biggest cut came from G&C Mutual Bank who cut 50 basis points, taking their variable rate first home-owner loan to 2.79 per cent.

“There are plenty of lenders who are passing on the full rate cut to customers and switching loans is getting easier and cheaper all the time.

“More lenders are going completely online and accepting applications that you can put together on your lounge at home.” 

WHO HAS CUT THEIR CASH RATE?

  • ANZ
  • ATHENA
  • AUSWIDE BANK
  • BANK OF MELBOURNE
  • BANKSA
  • BANKWEST
  • CBA
  • FREEDOMLEND
  • HOMESTAR FINANCE
  • MACQUARIE BANK
  • NAB
  • PEPPER MONEY
  • RACQ BANK
  • RAMS
  • REDUCE HOME LOANS
  • ST GEORGE
  • SUNCORP
  • UBANK
  • WESTPAC

*source Property Observer

Posted in Buy, Latest news, News on 4th October, 2019