Bendigo Bank Joins Rate Cut Movement Amid RBA Decision
Bendigo Bank has officially announced that it will be passing on the Reserve Bank of Australia’s (RBA) recent interest rate reduction of 0.25%, effective from June 6. This move aligns the bank with numerous lenders that have responded promptly to the RBA’s decision made at its May meeting. Nevertheless, Bendigo Bank remains somewhat behind many competitors that have already implemented cuts prior to the given date. Taso Corolis, Bendigo’s Chief Customer Officer for Consumer Banking, expressed hope that this rate slashing would provide essential relief for homeowners, indicating an understanding of the financial pressures households have faced recently.
“Many of our lending customers welcomed the RBA’s rate cut, and we’re committed to providing homeowners with the necessary relief,” Corolis stated. He also mentioned that this would be the bank’s second interest rate cut, following another reduction planned for 2025.
As the banking environment realigns post-RBA’s announcement, banks large and small swiftly engaged in the wave of rate reductions. Notably, NAB was the first of the Big Four banks to announce a complete pass-on of the interest rate cut, closely followed by Commonwealth Bank, ANZ, and Westpac.
For instance, a homeowner with a $600,000 loan over 25 years would see a reduction of approximately $91 per month due to this rate adjustment, moving the average variable interest rate to about 5.81%—with the most competitive rates dropping to 5.40%. However, a significant number of borrowers—nearly 60 lenders—remain uncertain about whether they will receive similar relief in the coming days.
Among the financial institutions yet to announce changes to their mortgage rates are:
- Adelaide Bank
- Arab Bank Australia
- Australian Military Bank
- Bank of China
- Defence Bank
This list comprises several other lenders, many of whom are currently evaluating and delaying their response to the RBA’s policy alteration.
Sally Tindall, data insights director at Canstar, indicated that customers have the power to switch banks if their current lender does not respond to the rate cut. She urged homeowners to take advantage of competitive mortgage offers from other institutions, especially amidst rising living costs.
“We understand that the financial burden for customers has been heavy lately. If you’re on a variable rate, it’s within your rights to seek a lender who can provide a better deal,” she highlighted.
The Big Four banks have collectively committed to passing on the 25 basis point decrease, albeit with varied timelines. While CBA, NAB, and ANZ plan for their adjustments by May 30, Westpac customers will have to wait until June 3 for similar relief.
Additionally, other lenders like Athena and Unloan are set to offer rate cuts as early as May 20, while Macquarie has already announced adjustments ahead of the pack, implementing changes on May 23.
Financial experts argue that the longer banks delay passing on these cuts, the more they profit at the expense of borrowers. Rachel Wastell from Mozo commented on Macquarie’s proactive strategy, suggesting that their swift action positions them advantageously in a market filled with slower responses.
With the Big Four holding an estimated $1.5 trillion in owner-occupier loans, even minor delays in implementing the interest rate reductions can result in significant gains for banks, amounting to potential earnings of millions per day from retained interest.
Customers are encouraged to communicate with their lenders to determine the exact date when the interest rate cut will apply, as timelines may vary from May 20 to June 11.
Ultimately, while many lenders are jumping at the chance to pass on the RBA’s rate cut, homeowners must remain vigilant and proactive to ensure they receive the best possible terms for their mortgage. In these challenging economic times, having the choice to switch lenders could provide crucial savings for borrowers struggling to accommodate the increasing cost of living.
