Mortgage customers miss out on savings held by greedy banks

MONEY-hungry banks have left customers to pay much higher interest rates by continually failing to pass on the full cash rate cuts.

EXCLUSIVE

MONEY-hungry banks have left customers to pay much higher interest rates by failing to pass on cash rate cuts which has resulted in them missing out on savings.

The spotlight has been shone on Australia’s big four banks this week after Prime Minister Malcolm Turnbull ordered the lenders a “please explain” on how they set their interest rates after failing to pass on the Reserve Bank’s 0.25 per cent cut on Tuesday in full.

Analysis crunched by financial services company Canstar found since the cash rate begun its downward spiral in November 2011 from 4.75 per cent to now 1.5 per cent, National Australia Bank has been the greediest keeping 0.86 per cent of the falls from its customers.

ANZ has kept savings on its standard variable rate (SVR) of 0.7 per cent back from customers on their home loans, followed by Westpac at 0.68 per cent and CommBank at 0.66 per cent.

BIG FOUR BANKS FAIL TO PASS ON RBA RATE CUT

AUSTRALIAN BANKS MOST PROFITABLE IN THE WORLD

On a $300,000 30-year loan with the average standard variable rate of 4.71 per cent a cut of 0.25 per cent would save customers about $45 per month.

Canstar spokesman Mitch Watson said despite the criticism of the big four banks, many other lenders in the market have also failed to pass on the full cash rate cuts.

“A number of smaller institutions have followed the big four’s lead, with only a very small number passing on the full rate cut,’’ he said.

Watson warned customers not to focus on their benchmark standard variable rates.

“The package home loans of the big four for example are generally 70 basis points cheaper than the standard variable rate,’’ he said.

Following this week’s cut, Westpac has the highest SVR of the big four at 5.29 per cent, followed by ANZ and NAB at 5.25 per cent and CBA at 5.22 per cent.

But there are rock-bottom deals available in the three per cent range which industry experts have urged borrowers to pounce on.

Many lenders are still yet to make an announcement on whether they are cutting their interest rate after the RBA’s announcement on Tuesday.

Financial comparison site RateCity’s spokesman Peter Arnold said a “rate war” has erupted among smaller lenders all pushing for the lowest rate on the market.

According to their database, lender Reduce Home Loans is offering a variable rate of 3.35 per cent — the lowest-ever deal the site has seen.

EMAIL:[e-mail]

TWITTER:@sophieelsworth

Originally published as Mortgage customers miss out on savings held by greedy banks