Mortgage holders at risk of losing $92m in interest from rate cut delays

Aussie mortgage holders are at risk of losing tens of millions of dollars in interest the longer lenders withhold passing on the latest rate cut.

Lenders delaying passing on the latest round of rate cuts are costing Aussie mortgage holders about $92m in interest, according to the latest Finder research.

The Reserve Bank of Australia (RBA) announced a cut of 25 basis point to the cash rate on Tuesday, dropping it from 4.35 per cent to 4.10 per cent.

It’s the first rate change since November 2023 and the first rate cut since November 2020 during the Covid-19 pandemic.

All four big banks have since announced they will follow suit over the next two weeks and adopt the rate cut.

Reserve Bank of Australia governor Michele Bullock revealed a rate cut on Tuesday for the first time since 2023. Picture: NewsWire/ Monique Harmer

However, Finder analysis revealed delays in passing the rate cuts onto mortgage holders would cost Aussies about $92m in interest.

Only one in three lenders have said they will pass on the cut since the RBA’s announcement.

Finder head of consumer research Graham Cooke said Aussie homeowners should be urging their lender to implement the cut sooner rather than later.

“Every extra day without a cut leaves many Aussie homeowners with tighter budgets,” Mr Cooke said.

“If your bank isn’t looking out for you when all eyes are on an RBA cut, when will it?”

Anthea is the only lender to have so far passed on the RBA’s cut to customers, according to Finder, having made the change on Tuesday.

Aussie mortgage holders are hoping to see the rate cut passed onto them as soon as possible. Picture: NewsWire / Gaye Gerard

ANZ, Commonwealth Bank, NAB, Suncorp and Macquarie Bank will pass on the cuts on February 28.

Westpac, Bank of Melbourne, St George, BankSA and ING customers will have to wait until March 4 until they see the cuts.

The Bank of Sydney will pass on the cuts on March 12, while HSBC will effect the change on March 10.

Mr Cooke said there were ways people could save on mortgage costs, including refinancing.

“Social media was full of Aussies celebrating their bank announcing a 25-point cut on Tuesday – and it was refreshing to see some lenders announce they will be passing on the full rate cut,” he said.

“The reality is you can likely save more than a couple of rate cuts by switching to a better deal.

“A reduction of even half a per cent can be the difference of thousands of dollars a year.

“Shop around to find a variable home loan that offers a lower interest rate than your current provider.

“The very lowest rates now have a ‘5’ in front of them.”