Treasurer urges Australians to ‘shop around’ as big banks fail to pass on rate cut in full

Treasurer Josh Frydenberg has urged Australians to “shop around”, as the big four banks reveal they will not pass the interest rate cut on in full.

The Royal Bank of Australia cut interest rates to a record low of 0.75 per cent on Tuesday, but the big banks have not passed on the full rate cut.

ANZ, Commonwealth, NAB and Westpac have all cut rates by between 0.13 and 0.15 per cent.

Mr Frydenberg expressed disapproval for the banks failure to pass on the cut in full.

“It’s very disappointing and they have to explain to their customers why they’re not getting the full benefit of this rate cut,” he told 3AW’s Tom Elliott.

For someone with a $400,000 mortgage, the full interest rate cut would equate to lower interest payments of about $720 a year.

“It’s not insignificant,” Mr Frydenberg said.

“My message to your listeners is to shop around, express your displeasure to your bank if they have not passed the rate cut on in full.

“As the Reserve Bank itself has said, the cost of borrowing, for the banks, has come down … that is why it should be passed on.”

Mr Frydenberg said Australia’s historically low interest rate reflects global trends.

“About three quarters of the developed economies in the world have inflation rates below two per cent, and about a third of them have inflation rates below one per cent,” he said.

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Image: Bloomberg