Banks were concerned primarily with maintaining their profit levels instead of reducing mortgage rates in line with RBA cash rate cuts during 2019, says the ACCC. It urges Australians to switch lenders to achieve lower rates.
The ACCC’s Home Loan Price Inquiry interim report indicates the banks were trying to shore up their profitability during a period of low interest rates and that the big four banks benefitted from a sustained decrease in their funding costs in 2019.
“However, the inquiry findings shed an important light on bank decision-making and raise questions about whether the banks could, at the time, have passed on a higher proportion of those RBA cash rate cuts to their mortgage customers,” says ACCC chair Rod Sims. The Inquiry also found that home loan pricing practices continue to make it difficult for consumers to compare different mortgage products.
Even a small reduction in interest rates could save thousands of dollars over the life of a mortgage and consumers should shop around to get a better interest deal, says the ACCC.