• The place to find the right expertise and make better decisions
  • Find the right expertise
Tom H.
Tom H.
Glen Alpine, NSW

When we got our home loan early this year the rate was 4.22% and since then the RBA has cut rates twice but when I looked at our rate online it is showing 4.02%. Should we have received more than 0.2% rate drop?

8 years ago


Tom. Hi. You are certainly in the right place to be asking that question.
If you have seen two RBA rate cuts since taking out your loan and only benefiting by 0.2% then your lender has been extremely conservative.
Don't get me wrong, every lender has held back in passing on the cuts.
Depending on your circumstances, there could be an opportunity to refinance you into a significantly better deal. I could provide you with some recommendations that may quickly repay the cost of refinancing. I would however need to gather some addition detail to do so.
Please give me a call if you would like to discuss further
Best Regards
Ken Olds
1300 ASK KEN

Hi Tom,
Almost all lenders have been conservative in the rate reductions which have been passed onto the borrowers for the last two 0.25% RBA rate cuts. The average passed on at each movement was 0.11%. It's expected that the same will happen if the rates are cut again. This is common during a period of extremely low rates. The banks have to manage their profit distribution across all channels and low rates have them shifting attention towards deposits hence some of the rate cut was distributed to increase deposit rates proportionately.

If you are looking for a sharper rate, this probably a good time to do so as there is increased competition between lenders. We have recently won't the Canstar 'Best in Industry' award along with many other awards over the last 7 years. Feel free to give me a buzz if you'd like more information.

John J Maxwell
Senior Mortgage Consultant
Cocalex Holistic Mortgage & Finance Consulting
0434 544 225

Hi Tom

I’m with you and I’d be suggesting you contact your lender as soon as possible as a few things need to be clarified.

The RBA cut the cash rate in May and August 2016 by a total of 0.5% and I’m not aware of any bank or lender who didn’t pass on the full 0.25% from May’s rate cut.

If as you say, you got your home loan early in the year then I would have thought your rate should have been reduced, at the time, from 4.22% to at least 3.97%.

A number of lenders didn’t pass on the full 0.25% from the August rate cut however most did cut their rates somewhere between 0.10 to 0.15%.

If for example your lender cut rates by 0 .10% in August then there is a possible 0.35% reduction from the time you took out the loan at 4.22%. By my calculations your rate should be in the vicinity of 3.87%.

The important action is to call your lender and ask some questions. You should ask them how much of the May and August rate cuts they passed on to their customers and then calculate what your rate should be.

If there has been a miscalculation on your rate, it is important to request your lender not only change your rate but also back date the interest you have paid due to the rate being incorrect.

Well done on keeping tabs on your interest rate. I hope this helps




Thanks Paul, I was thinking much the same thing.

I am going to call our bank today and get them to clarify, will let you know how I go.

regards, Tom

Good question Tom,
This is one many people will be asking.
On one hand you are right, the RBA has reduced their cash rate this year and in the old days this would have likely been passed on by the banks.
Today, the banks have very complicated ways in which they get money in to lend out to it's customers. The cost of this money is getting a bit more expensive. For example an average 1 year term deposit rate is 3% as banks fight for customers savings.
So the banks are unwilling and not obligated to pass on the rate cuts to its home loan product rates. That being said I bet they will go up quicker😆.
Having said all this the 4.02% rate is not a bad rate!
The great thing is it is now easier than the old days to move your loan to another cheaper lender. Obviously, there is alot to consider here and before you jump for a great rate, it's a good idea to speak with a broker and fully consider your options.
Great rates below 4% are still available to good customers.
Sometimes, just a good old fashioned annoyed call to your current lender may get you a lower rate, no harm in asking, but be prepared with some competitor rates you can use in these negotiations.
If you need help call me Tom.
Chris Booth
Announcer Mortgages

I forgot to mention, one of the great things about using a broker.
At Announcer, all of our clients get a review of their lending annually in our Project Gemma program.
We review the clients current rates, compare these to the market, make that call to the lender to provide a better rate or if the opportunity to move makes good financial sense, we recommend and support the process of a move.
This can be difficult to stay on top of so get professionals working for you Tom!

Kudos to you Tom for actually having the nous to know what your actual rate is as lenders rely on people not checking and most do not!

Call your bank and let them know you are talking to a broker/s and ready to jump ship if you dont reduce my rate to x?

I would however consider asking a broker to do this on your behalf as we can often have a bit more clout as lenders retention teams know that we are motivated to refinance you elsewhere. A professional broker will always see what your current lender can offer providing the servicing calculator and policies suit your short, medium and longer term goals.

Distance isn't an issue as many of us will have clients Australia wide and even some overseas.

8 years ago

I thought it might be worthwhile to let you all know we called the bank and they agreed it didn't add up. The upshot is our rate was reduced to 3.85% so we are very happy. Thanks for all the great feedback.

Yes but the best rates are reserved for new customers. You can threaten to refinance or see s broker at look at 3.64% fixed

Your Answer

If you wish to include a video or audio response, you can do this by including links to Youtube, Vimeo or SoundCloud (https://www.youtube.com/watch?v=xxxxxxxxxx OR https://vimeo.com/xxxxxxxxx)

<% error.message %>