RBA interest rate cut of 0.5% needed: John Symond

John Symond, the founder and chairman of Aussie Home Loans, believes the Reserve Bank of Australia should cut rates by 0.5 percentage points tomorrow to stimulate growth in the non-mining sector of the economy.

"With the ANZ Bank lifting its mortgage rates recently and other banks seeking to do the same, no change or a drop of 0.25% will not do any good for the vast majority of Australians and businesses doing it tough," he says.

Symond says that weak home finance and retail figures are indicators that the economy is struggling with accelerating job cuts across Australia creating fear among consumers, who had reacted by "pulling in their horns."

"The Reserve Bank needs to provide stimulus for consumers to spend again, build or invest in property and take a holiday at home instead of capitalising on the high Australian dollars and travelling overseas.

"The Reserve Bank admitted last month that there is scope for a rate change in May as economic growth is slowing and concerns about unemployment are on the rise while recognising finally that we currently have a two-speed economy," he says.

Evidence of the lack of confidence among borrowers had been found in the surge of inquiries to Aussie from consumers doing their own financial or mortgage health checks.

But he told the News Ltd papers that it was vital that Australians become more vigilant and start asking questions about their mortgages, especially if the Reserve Bank doesn't act decisively at the May board meeting.

"Our research shows that more than 50% of our customers achieve up to a 0.75% saving by switching home loans," he says.

"Apathy is a killer for consumers getting a better deal and controlling their expenses, which will come under further pressure when the carbon tax kicks in on July 1," he says.