Who hasn’t cut rates
Many home loan customers are still waiting for lenders to do the right thing, writes Sophie Elsworth
NEARLY two weeks on from this month’s cash rate cut many lenders are yet to deliver the latest savings to variable home loancustomers.
Of the dozens of financial institutions that have said their rate will fall, UBank and CUA are among the worst offenders, taking the longest to pass on thedrops.
Both will wait four weeks until they pass on the cuts to borrowers on October 29.
Other banks to drag the chain in delivering the cuts included Virgin Money and the Bank of Queensland, which are not passing on the rate drop until October 25.
Financial comparison website RateCity’s spokeswoman, Sally Tindall, said the delay was a clever way for banks to “pocket millions bywaiting”.
“Some customers will be frustrated they’re still waiting for their banks to lower their monthly mortgage re payments, especially when other lenders can do it in a matter of days,” she said.
“Not only are a majority of banks only cutting by a fraction of the 0.25 per cent cut, some are also taking several weeks to pass onthesavings.”
Big banks ANZ and National Australia Bank both passed on their rate reduction of 0.14 and 0.15 percentage points respectively last Friday.
West p ac is waiting until Wednesday to pass on its 0.15 percentage point cut, but CB A is the slowest, waiting until October 22 to pass on a 0.13 percentage point drop.
A CUA spokeswoman said its long delay in passing on its 0.13 percentage drop was the result of needing to “balance a number of other business considerations”.
UBank passed on the full 0.25 per cent cash rate cut to its customers but has made them wait four weeks to receive it.
The bank’s chief executive officer, Lee Hatton, said the delay was because of a range of factors, including “regulation, individual communication with our customers and changes to repayments for our customers”.
This included allowing time to update its “systems and promotional material”, and “completing the necessary testing to make sure the changes are applied correctly to members’ loans”.
A full 0.25 percentage point cut on a $300,000 30-year mortgage with a new rate of 3.25 per cent would deliver borrowers savings of $51 per month.
Online home loan platform Lendi’s co-founder, David Hyman, said whenever a rate cut announcement was made it should prompt customers to review their loans.
“If you haven’t refinanced in the past 12 or 18 months you should be getting on the phone to your lender or use a platform like ours,” he said. “There’s rates in the market in the high 2s for owner-occupier principal and interest borrowers, so if you are not close to 3 per cent you should be demanding that.”