Big Banks Fast-Track Interest Rates Rise

By fast-tracking the latest interest rate rise by four days the big banks cheated borrowers out of $17 million.

Although the Big Four Banks took an average of nine days to pass on the Reserve Bank cuts in February and April this year they somehow managed to pass on the RBA's latest increase in just five days.

The Daily Telegraph has reported that by the banks moving faster on the rate rise than the cut, the banks will have collected an extra $17 million in interest.

Once again the banks have found a way to profit at the expense of consumers.

The Big Four Banks dominate home loans market

The Big Four Banks were writing three out of five home loans in mid 2007. They now write four out of five.

The Big Four are dominating the sector by buying out their rivals examples are: - St. George & RAMS being bought by Westpac, CBA buying Bankwest, and one - third in Aussie (which in turn bought Wizard) and recently NAB got ACCC approval to buy Challenger.

The major banks have also benefited due to the smaller banks having difficulty obtaining funds and suffered from a consumer perception that they are less financially stable.

The results of a recent survey conducted by Choice have shown that the big banks also benefited from the difficulties customers experienced when they tried to change banks.

In an attempt to rectify this Federal Government had set up a switching assistance service last year. Unfortunately only two customers a week reportedly use the service.

Get your quotes now

What to find out more? Enquire now

Published on October 10-th, 2009 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

More on this topic

Enquire about Home Loans
Please enter the estimated value of the property

Important Information

Not all providers in the market are included in the comparison.

Any information or advice contained on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs.