Reserve Bank of Australia governor Philip Lowe has some free advice for mortgage holders in Australia: go and find a better deal.
Most banks passed Tuesday’s 0.25 per cent rate cut on in full. But ANZ, Westpac and Suncorp did not.
Others passed on bigger cuts for investors.
Speaking at an RBA board dinner on Tuesday night, Dr Lowe admonished the banks who failed to pass on the full rate cuts and advised borrowers to “shop around.”
Dr Lowe had earlier said the banks should pass on the full cuts because of a substantial reduction in banks’ funding costs.
“I didn’t say they would pass it through, I said they should pass it through. It’s disappointing to me that that hasn’t been the case,” Dr Lowe said.
“All I can do is encourage people to shop around. If your bank has not passed this through, then I encourage you to go and look for a better deal somewhere else.” Certainly, Chan & Naylor Finance has noticed a large increase in refinance enquiries since.
Dr Lowe said the onus was on consumers to pressure banks into competing harder with each other, with the competition leading to cheaper mortgages.
“The experience has been, over recent times, that when people do go and look for a better deal from another bank, or even actually ask their own bank, they can normally find a better deal.
“So I encourage everyone who has a mortgage to go to their bank and ask for a better deal. If you haven’t done it recently, you can probably find you can get a better deal.”
Dr Lowe said a collective response by bank customers would help force lending rates down for everyone.
“In the end, the way we get banks to compete with one another is be responsive consumers. We go and search out better deals, we ask for them, and then we switch.
“The 25 million of us living in Australia can make the banks compete more effectively by going and asking for a better deal and switching. I encourage everyone to go and do that if you’re unhappy with the mortgage rate that you’re currently paying.”
Chan & Naylor Group have national offices in North Sydney, South West Sydney, Sydney, Pymble and Parramatta in New South Wales, Melbourne, Moonee Ponds and Hawthorn in Victoria, Brisbane and Capalaba in Queensland, and East Perth in Western Australia that can help you get the best loans. Contact us here.