RBA cash rate slashed: Dozens of Australian lenders still to pass on cuts

A stack of Australian lenders are yet to say whether they will pass on Tuesday’s rate cut to customers, more than 24 hours after the RBA announcement.

The board has slashed the cash rate from 4.35pc to 4.10 per cent, with NAB, ANZ, CBA and Westpac racing to reveal they would pass on the 0.25 per cent cut in full.

But analysis from comparison site Finder and Savings.com.au has identified dozens of lenders who, at the time this article was published at 8pm AEDT, were yet to do the same, leaving customers in limbo.

Among them is AMP, IMB Bank, P&N Bank, People’s Choice and RACQ Bank.

Finder’s head of consumer research Graham Cooke expects most, if not all, will come to the party by the end of the week.

“I suspect it is banks being a bit lax. I think that eventually most will pass on the cuts to customers,” he told 7NEWS.com.au.

“Mortgage holders are waiting with bated breath for that relief.”

For lenders that have already moved, Cooke said it was positive to see them all passing on the cuts in full, which is not always the case.

Cooke said he had never seen as much attention on an RBA decision as there was on Tuesday, and the banks were clearly under the microscope.

“The social pressure to pass it on given the cost-of-living pressures is sky-high,” he said.

Families are likely to save at least $90 every month and Cooke said the major question for customers now is what they do with the extra money — save it, invest it or drop it on their mortgage.

He estimated that up to six years could be shaved off a 30-year home loan if there are four rate cuts and borrowers continue to service the debt with their current monthly repayments.

Earlier, Sunrise host Nat Barr took aim at the big four banks for waiting at least 10 days before the rate cuts kick in.

The cuts will b effective from February 28 for NAB, ANZ and CBA customers, and March 4 for Westpac borrowers.

But interest on loans is normally calculated daily based on the unpaid balance and will cost Australians about $92 million by the end of the month, according to Finder.

“The headlines were screaming that all banks passed it on. They kind of did and didn’t because the big four banks won’t calculate the cut until the end of February, in some cases early March. Should they calculate it sooner?” Barr asked.

Workplace Relations Minister Murray Watt said the banks should move swiftly.

“The big four banks should be passing on this rate cut as soon as possible — not one day delay in making that happen because I think Australians really deserve this rate cut,” he said.

Finder says the big four hold $1.55 trillion in owner-occupied mortgages or close to 72 per cent of the market.

When pressed on why the majors were not acting more quickly to help borrowers, Australian Banking Association chief executive Anna Bligh argued that with their millions of customers comes an “obligation to get it absolutely accurate”.

“You can forecast (the cut) but until you actually hear it from the governor of the reserve bank’s mouth nobody’s going to take anything for granted,” she said.

“I should say it comes much much more quickly than a rate increase.

“Banks are required when they increase rates to give 30 days notice, so depending on when your mortgage payments fall in the month, it can take anywhere from six to ten weeks for an increase to apply.

“So I think getting the whole thing done in 10 days is much more welcome than a rate increase, no matter how long it takes.”