The Reserve Bank of Australia (RBA) yesterday delivered an early Christmas present to homeowners, slashing the official cash rate by 25 percentage points to 3.25 percent, the lowest level in three years. However, major lenders have refused to pass the rate cut, reported The Australian.
If they pass on the cut, repayments on an AU$300,000 (S$379,480) mortgage will decline by almost AU$50 (S$63.25) per month. But currently, the four major banks — Westpac, National Australia Bank, Commonwealth Bank and ANZ would only say that lending rates are under review.
Nonetheless, Terry McCrann, a leading business commentator in Australia, said that banks will likely pass on the full interest rate cut, which was announced by the RBA on 2 October.
The major banks are expected to earn over AU$6 million each day (S$7.59 million) if they fail to pass the rate cut.
Meanwhile, Treasurer Wayne Swan called on banks to do the right thing and pass on the 0.25 percent cut in full, saying that they shouldn’t “crimp something from the cut”.
Alan Kirkland, Chief Executive Officer of consumer watchdog Choice, said: “Australia’s major banks are at near-record levels of profitability, and this is no time for them to be clipping the ticket on interest rate cuts.”
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