ID :
17624
Mon, 09/01/2008 - 09:17
Auther :
Shortlink :
https://oananews.org//node/17624
The shortlink copeid
Swan wants banks to cut rates
(AAP) - Treasurer Wayne Swan would like the banks to bring down their mortgage rates over and above a predicted cut by the Reserve Bank of Australia (RBA) this week.
As Wizard Home Loans became the first lender to cut its variable interest rate in seven years, Mr Swan says that, at the very least, banks should pass on any rate cut from the RBA.
Wizard has cut its variable rate from 9.54 to 9.29 per cent because the cost of
funding its mortgages has dropped.
The move comes ahead of the RBA meeting on Tuesday, where the central bank is
expected to cut the official cash rate of 7.25 per cent by 0.25 of a percentage
point.
Wizard will keep the reduction whether the RBA cuts rates or not. The only movement
that could force its rates back up would be an increase from the RBA.
Wizard chief Mark Bouris says he hopes his competitors will follow his company's lead.
"The cost of funds for us has decreased so we decided to move ahead of the Reserve
Bank because the Reserve Bank may not even move. They may or they may not," he told
Sky News.
"We've made a cut notwithstanding if the Reserve Bank do or do not raise their
rates, if they don't raise their rates our cut remains."
He predicts the expected move by the RBA will be the first of at least two, if not
three, official rate cuts this year.
Mr Swan told reporters there'd be no excuse for lenders not to pass on any rate cut.
ANZ Bank and the National Australia Bank have committed to passing on lower mortgage
rates, while the other two big banks, Commonwealth and Westpac, have refused to give
any guarantees.
"I don't think the other lenders need to be magicians, they just need to do the
right thing by families under pressure and pass on any cut if that's decided by the
Reserve Bank," Mr Swan told reporters.
"If the Reserve Bank cuts rates this week there'll be absolutely no excuse by any
lender for not cutting rates. None at all."
Aside from a cut by the RBA, Mr Swan said the cost of funding mortgages had been
falling.
Banks blamed the cost of credit when they raised rates by over and above any
increases from the RBA. Now, Mr Swan wants them to act as costs come down.
"There have been changes in the cost of funding in recent times and they will have
an impact over time, so over time the banks should be coming down over and above any
cut in the Reserve's rate," Mr Swan said.
"There's no doubt that banks and other lenders went up in a nanosecond when the
Reserve Bank went up and they should come down as quickly when the Reserve Bank
comes down.
"Over and above that, there have been changes in funding costs on international
markets and in recent times they've been coming down as well and that does mean that
banks will have the capacity to further reduce rates given those reductions in other
funding costs outside the Reserve Bank cycle."
As Wizard Home Loans became the first lender to cut its variable interest rate in seven years, Mr Swan says that, at the very least, banks should pass on any rate cut from the RBA.
Wizard has cut its variable rate from 9.54 to 9.29 per cent because the cost of
funding its mortgages has dropped.
The move comes ahead of the RBA meeting on Tuesday, where the central bank is
expected to cut the official cash rate of 7.25 per cent by 0.25 of a percentage
point.
Wizard will keep the reduction whether the RBA cuts rates or not. The only movement
that could force its rates back up would be an increase from the RBA.
Wizard chief Mark Bouris says he hopes his competitors will follow his company's lead.
"The cost of funds for us has decreased so we decided to move ahead of the Reserve
Bank because the Reserve Bank may not even move. They may or they may not," he told
Sky News.
"We've made a cut notwithstanding if the Reserve Bank do or do not raise their
rates, if they don't raise their rates our cut remains."
He predicts the expected move by the RBA will be the first of at least two, if not
three, official rate cuts this year.
Mr Swan told reporters there'd be no excuse for lenders not to pass on any rate cut.
ANZ Bank and the National Australia Bank have committed to passing on lower mortgage
rates, while the other two big banks, Commonwealth and Westpac, have refused to give
any guarantees.
"I don't think the other lenders need to be magicians, they just need to do the
right thing by families under pressure and pass on any cut if that's decided by the
Reserve Bank," Mr Swan told reporters.
"If the Reserve Bank cuts rates this week there'll be absolutely no excuse by any
lender for not cutting rates. None at all."
Aside from a cut by the RBA, Mr Swan said the cost of funding mortgages had been
falling.
Banks blamed the cost of credit when they raised rates by over and above any
increases from the RBA. Now, Mr Swan wants them to act as costs come down.
"There have been changes in the cost of funding in recent times and they will have
an impact over time, so over time the banks should be coming down over and above any
cut in the Reserve's rate," Mr Swan said.
"There's no doubt that banks and other lenders went up in a nanosecond when the
Reserve Bank went up and they should come down as quickly when the Reserve Bank
comes down.
"Over and above that, there have been changes in funding costs on international
markets and in recent times they've been coming down as well and that does mean that
banks will have the capacity to further reduce rates given those reductions in other
funding costs outside the Reserve Bank cycle."
