Had the major banks just followed RBA moves, the official cash rate would be much higher, according to the head of the Australian Bankers Association.
Steven Munchenberg, chief of the ABA, told The Australian that at the moment, the spread between mortgage rates and the official cash rate is about 100 basis points above the historical average.
“That’s taken into account by the RBA,” he said. “We think the official cash rate could be higher if the banks had just followed the RBA moves.”
While the major banks have been criticised by government for lifting rates out of step with RBA movements, Munchenberg says banks needed to better explain the reasons for doing so.
He admitted that justifying independent rate moves is particularly difficult given reports of record profits.
According to Munchenberg, Australian banks need to be highly profitable to attract international investors.
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Top Suburbs :
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.
We value your privacy and treat all your information seriously - you can check out