NAB Tips 3rd Rate Reduction This Year

Posted on 20/06/2019  
NAB Tips 3rd Rate Reduction This Year

National Australia Bank is tipping a third interest cut in late 2019. The rates prediction, first made last month by Westpac, comes after the official interest rate dropped to 1.25% on 4 June, and widely-accepted expectations of a second reduction in July or August.

NAB says a third rate drop late in the year that would take the RBA’s cash rate to 0.75%. It says it’s “tentatively” timing the third 2019 rate cut for November – and expects lower interest rates to be supported by other fiscal stimulus later in the year.

“We would not rule out the possibility of alternative monetary action, in addition to further rate cuts, if the economy remains subdued,” it says.

Meanwhile, lenders who declined to pass on the RBA’s interest rate cut in full have angered customers and sparked “a rush to refinance”.

More than half of Australia’s banks and other lenders have defied the Reserve Bank and the Federal Government by refusing to pass on the full official interest rate reduction to home loan borrowers.

Angry customers have been flooding mortgage brokers and loan advisers with refinancing requests since ANZ and Westpac started the trend by pocketing part of the RBA’s 0.25% rate reduction for themselves.

An analysis by comparison website RateCity.com.au found that 67 lenders had announced rate reductions since the RBA’s move - and 34 of them had not passed on the full 0.25%.

More than 40 other lenders — mainly small operators — had not yet announced a move.

RateCity research director Sally Tindall says customers who have not received the full reduction had the right to feel ripped off - and also had the right to move their mortgage to another lender.

“A lot of customers who aren’t getting the full cut will feel let down by their bank, especially when they see big banks like CBA passing it on in full,” she says.

“It’s also incredibly frustrating to see some banks take their time passing on the cut. A number of banks are taking three or more weeks to pass the rate cut on, while other lenders were able to cut their rates within days of the announcement.”

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