Rate cuts passed on by different lenders

Went into anz today, got the 1.45 discount and the break free package waived again this year

 

What the? How'd you get the package fee waived/what did you say to them?

 

We have a good relationship with the branch manager and asked the question. He was happy to oblige.

 

We do have to pay the fee first and it gets reimbursed.

 

Any ideas why?

 

Details from here

How can ACCC think this is just a co-incidence and not colluding is beyond me.

Second tier lenders had a great opportunity but they decided to follow the majors.

Cheers,
Oracle.

 

If 0.12% gets taken off my current rate, my new rate will be
3.94%. I won't complain about that!

 

Go back about the same time (ok maybe a bit longer -pre GFC and the margin between 'carded rate' and official rate was about 1.5-2%.
With discount it equaled about .8-1.3%

Now the variance is about 3% between carded and official rates.

So even at 1.5% discount the banks are comfortable.

Blacky

 

That pretty much covers it. When everybody focus' on getting the best rate today, it ends up being at the expense of those who got the best rate yesterday.

I blame everybody else for this.

 

BoM is slightly different than STG. 0.13% for P/I and 0.09% for I/O. This still places their standard rates at 8 basis points better than STG while they try and gain market share in Melbourne.

 

This is the comprehensive list

Which banks are passing on the August 2016 rate cut? | finder.com.au

 

Rolf
I agree to an extent. However the small lenders are mostly inconsequential already, and as soon as they become 'sizable' one of the majors buys them.
Look at bank west, st George etc.

The size spread between the majors and non majors is too considerable for any real price competition already. A race to the bottom (or otherwise) won't impact on that. The minors need to provide a different model all together.

Look at St George pre take over. They dominated some niche markets (small business as one example) due to their service provision. They were competitive with pricing, but never the cheapest.
Bank west for a long time dominated the property development niche. Real Competition being presented by only SGB and Macquarrie (for the large developments).

They need to come up with a way to remain competitive, while remaining responsible lenders. Competing on price isn't going to get them far.

Therefore I think the race to the bottom is good for consumers. Though I don't believe there is a real race.

The banks have been blind siding the populace. Their price spread has significantly widened. Then they give some of this back buy increased discounts. Most people feel good about flogging the bank with a 1.5% discount rather than only .7. But the bank has increased its spread over the last few years by 1-2%.
Who is winning?
Who feels like they are winning?

Blacky

 

Looks like some banks are passing on cuts to investor loans? Correct?

Would this mean servicibility is enhanced?

 

Serviceability is improved marginally with a handful of lenders. But not at all for most lenders.

Lenders use assessment rates which are significantly higher than the actual rates you pay, generally above 7%. Whilst the assessment rate is determined as a margin above the actual rate, they also have a minimum value which was reached a long time ago.

As a result, rate movements down will not improve peoples servicing. Rates can even increase by about 1.5% without a change to most assessment rates. For most lenders, rate movements up or down make no difference to serviceability.

The CBA and NAB assess existing loans as a function of the actual rate (but use assessment rates for proposed loans). Their servicing will slightly improve as rates drop. Realistically though, these lenders are passing on 0.13% and 0.10% respectively. The change to servicing will be marginal.

 

I would be vary of serviceability achieved by a rate cut. Not good for your own financial health.

Each to their own

 

Another rate cut is expected in Nov.

Australian dollar remains a yield magnet for investors despite rate cuts

Good times!