Big 4 turn scrooge as rate tumbles

MORTGAGE holders were denied the bulk of an interestrate cut yesterday — and only two of the nation’s big four banks passed on a measly reduction to borrowers.

The country’s biggest lender, the Commonwealth Bank, delivered just a fraction of the Reserve Bank’s quarter of a percentage point drop, shaving 0.13 off all owner-occupier loans and investor principal and interest loans.

Investors paying interest only will be the sole beneficiaries of a full 0.25 percentage point cut.

National Australia Bank announced all owner-occupier loans and investor principal and interest loans would fall by 0.15 percentage points.

Investors on interest-only would receive a drop of 0.3 percentage points and the cuts will be passed on October 11 — 10 days after the Reserve Bank’s decision.

Reserve Bank of Australia governor Dr Philip Lowe yesterday cut the cash rate for the third time this year — it now sits at just 0.75 per cent.

The cash rate has been in free fall since November, 2011. There have been 15 cash rate cuts since then.

However if this month’s latest cut of 0.25 percentage points is passed on in full it would save borrowers with a $300,000 30-year owneroccupier principal and interest loan on the average rate of 3.91 per cent about $43 per month.

This presumes their interest rate would drop to 3.61 per cent.

Mozo’s spokeswoman, Kirsty Lamont, said the big banks have failed to do the right thing by borrowers and pass on the cuts in full.

“The big banks haven’t done their mortgage customers any favours this year by failing to pass through the full benefit of the Reserve Bank’s rate cuts,” she said.

She urged borrowers to shop around for a better deal.