Westpac and ANZ have followed the lead set by rivals Commonwealth Bank and NAB and will not pass on Tuesday’s 0.25 per cent rate cut in full.
Westpac announced it would only decrease variable home loan interest rates by 0.15 per cent, while ANZ said it will lower rates by 0.14 per cent, meaning each of the country’s Big Four have denied borrowers the full benefit of the Reserve Bank’s latest monetary easing.
Westpac pulled the trigger first on Wednesday afternoon, with ANZ following almost immediately.
The flurry came more than 24 hours after the Reserve Bank board cut the interest rate for the third time since June to a new record low 0.75 per cent, in a bid to lessen the cost of borrowing and kick-start the economy.
Treasurer Josh Frydenberg had already savaged CBA and NAB for failing to pass on the cut in full, with the two lenders announcing on Tuesday evening they would be lowering rates by 0.13 per cent and 0.15 per cent respectively.
Some of the smaller lenders have passed on the rate cut in full.
“The banks have a lot of explaining to do because this is very disappointing,” Mr Frydenberg told the Nine Network earlier on Wednesday.
“Customers should vote with their feet.”
Opposition leader Anthony Albanese and The Australian Chamber of Commerce and Industry were among others to chide big lenders for failing to pass on savings that could be used to to lift spending on retail.
Westpac’s consumer banking chief executive David Lindberg said the bank had to factor in the commercial pressures of a low interest rate environment, with its rate for principal and interest customers now at at 4.83 per cent.
ANZ’s group executive of retail and commercial, Mark Hand, also cited “the dynamics of record low interest rates” in lowering the bank’s standard variable principal and interest rate to 4.79 per cent.
“While we recognise many customers will use this as an opportunity to pay down their existing home loans faster, we hope this provides the economic stimulus the Reserve Bank is wanting to generate,” Mr Hand said.
ANZ’s changes, which also include a 0.25 per cent reduction in interest-only loans, come into effect on October 11, as do NAB’s.
Westpac’s changes come into effect on October 16, and the changes to CBA’s standard variable rate go live on October 22.
AAP
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