RACQ Bank passes on full RBA rate cut
RACQ Bank has again stepped up for its members, being one of the few institutions to pass on the full interest rate cut of 25 basis points to Queenslanders.
The new variable home loan comparison rate of 3.19 percent would come into effect from next week.
RACQ spokesperson Paul Turner said the decision had been made to benefit members of the Queensland-based bank, many of whom struggled with rising cost of living pressures.
“This has been a really tough decision for our business, but when we put our members first, it’s made easy,” Mr Turner said.
“While interest rates are low, it’s a great opportunity for Queenslanders to get in and pay off their mortgages sooner.
“However, new mortgagees need to be careful not to borrow too much now while rates are historically low - you must be able to make your payments when the rates start going up again as well.”
While the bank committed to the cut, Mr Turner said the Federal Government needed to carefully consider how the regulatory costs from the Royal Commission impacted smaller players in the market.
“Commissioner Hayne made the point customer-owned institutions could cop the brunt of regulation on the back of big banks’ mismanagement and greed, but now we’re the ones having to pay for it,” he said.
“Our regulatory levy has gone up by 14 percent and this hits a bank of our size very hard.
“We need banking competition in Australia, but it’s not just about having more players in the market, it’s about ensuring each and every player has an equal opportunity to compete.
“We estimate that for every basis point the Big Four doesn’t pass onto households, they retain about $137 million in margin.
“We need the Federal Government to take its foot off our necks by reducing the unfair levy we, the little guys, pay, so we can be a competitive alternative to the Big Four.”