Investors fare better, as owner-occupiers miss out on full rate cuts

The big four banks have all only passed on part of the RBA's 25 basis point rate cut, keeping a large chunk for themselves.

They've defied treasurer Josh Frydenberg's call for them to pass on the full cut, with further cuts expected in the not too distant future.

CBA and NAB were the first to cut their rates on Tuesday, with ANZ and then Westpac following yesterday.

Investors were the big winners. Investors with interest only investor mortgage's saw their rates get cut the full 25 basis points by ANZ, CBA and NAB. Westpac were the only ones not to pass fully.

The labour market performance was one of the key statistics that drove the RBA to cut rates. Source: RBA

Owner occupiers paying principal and interest on variable rate home loans is the number one market for most banks and home lenders.

The number of fixed home loans is down over 50 per cent since August 2017, a drop from 11,373 to 5,416.

According to Finder.com.au, there has been a near 400 per cent spike in visitors to their pages about breaking from fixed loans.

Following October’s RBA rate cut, there was a 69 per cent spike in visitors across all Finder home loan pages, including a 296 per cent jump in views of the variable home loans page, week-on-week.

Graham Cooke, insights manager at Finder, said fixed rates seem "less sexy" given there are likely further cuts on the way.

GDP growth continues its downward trajectory. Source: RBA

“In our RBA cash rate survey we found that nearly three-quarters (72%, 26/36) of experts predicted that the cash rate will reach 0.50% before it starts to increase," Cooke said.

“Based on all the economic indicators the RBA reviews – employment, inflation, housing, wages – we are likely to be in a low-rate environment for the foreseeable future. 

“Unless we see huge drops in fixed loan rates, variable loans will likely stay in vogue,” Cooke said.

The lowest current fixed home loan rate sits at 2.79% (Mortgage House and Greater Bank) which is higher than the lowest variable home loan rate on the market at 2.69% (Reduce Home Loans). 

Far and away the biggest cut came from G&C Mutual Bank who cut 50 basis points, taking their variable rate first home-owner loan to 2.79 per cent.

House prices have continued to bounce back. Source: RBA

InfoChoice.com.au chief executive Vadim Taube has urged home loan borrowers to check their rate and compare it with other loans in the market. 

“If your lender hasn’t passed on the full RBA rate cut to you, you may like to listen to the treasurer Josh Frydenberg and think about voting with your feet.

“There are plenty of lenders who are passing on the full rate cut to customers and switching loans is getting easier and cheaper all the time. 

“More lenders are going completely online and accepting applications that you can put together on your lounge at home.”  

Who's cut their cash rate?

ANZ

Athena

Auswide Bank

Bank of Melbourne

BankSA

Bankwest

CBA

FreedomLend

Homestar Finance

Macquarie Bank

NAB

Pepper Money

RACQ Bank

RAMS

Reduce Home Loans

St George

Suncorp

UBank

Westpac