Customers should ditch rate cut “holders”: Mozo's Kirsty Lamont

Customers should ditch rate cut “holders”: Mozo's Kirsty Lamont
Customers should ditch rate cut “holders”: Mozo's Kirsty Lamont

GUEST OBSERVER

The Big 4 banks have no excuse to hold onto any rate cut made today and customers should be prepared to ditch and switch if the banks hold out.

Mozo data shows that the average Big 4 Bank standard variable rate of 5.61% is now 0.52 basis points higher than the market average of 5.09%.

Last month’s out of cycle rate hikes will already cost big bank home loan customers an extra $372 in interest repayments annually .

Any moves by the Big 4 to hold onto cuts today will be deeply unpopular, especially in light of the windfall profits announced by NAB and ANZ last week.

Last month's rate hikes sparked a 25% increase in refinancing activity on Mozo.com.au and we'd expect to see the big banks lose more customers if they hold out today.

Since Westpac hiked rates on 14 October, just 9 lenders have followed suit, but in this instance no news is not necessarily good news for borrowers.

Regardless of which way today’s Reserve Bank decision goes, Mozo is predicting a second wave of home loan rate changes as lenders take the opportunity to make their move.

Intense competition among online and non-bank lenders means we could see them pass on the full 25 basis point discount to really increase their market lead.

Seventeen lenders now have interest rates below 4%, see graph below: 

Click to enlarge

Customers should ditch rate cut “holders”: Mozo's Kirsty Lamont

 

Click to enlarge

Customers should ditch rate cut “holders”: Mozo's Kirsty Lamont

 

Kirsty Lamont is marketing director of Mozo.

Tags: 
Mortgage Rate

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