The Reserve Bank of Australia and the federal government have made it clear that they expect banks to pass on official interest rate cuts in full to borrowers. However, data from RateCity regarding the response of the banks to recent rate cuts suggests that borrowers should be prepared to be disappointed, with the banks likely to pass on as little as half of any cut that the RBA might announce today:
Data obtained from comparison website RateCity highlights the growing interest rate fatigue by the big four banks. In the past three cash rate cuts, less and less was passed on each time to customers.
Across the previous year’s cuts in June, July and October, the average rate passed on by the four major banks went from 0.22 per cent in June, 0.21 per cent in July and 0.14 per cent in October…
