Who hasn’t cut rates

Many home loan cus­tomers are still wait­ing for lenders to do the right thing, writes So­phie Elsworth

The Western Star - - Lifestyle -

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.”

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