Mortgage Rates Not Going Down In Australia

From The Daily Telegraph:

Under normal circumstances, a rate cut would mean mortgage rates would come down. In the past year, the RBA has increased rates by 1 per cent but the banks have added another 0.50 per cent with their own, unscheduled hikes – painful increases for already struggling households.

The credit crunch has meant many non-bank lenders have been priced out of the market, leaving the banks to run riot.

This lack of competition now raises the spectre of banks raising profits to levels not seen since the 1990s, before Aussie John Symond and Wizard Homeloans entered the market, offering competitive loans and halving the banks’ profits at a stroke.

Even after competition arrived, Australian banks have been making an enviable living, despite their plaintive cries.

Just 12 retail banks made a combined $21.6 billion last year in profits, after tax, with the big four banks taking 80 per cent of that total.

Rate cuts are designed to stimulate the economy and save jobs, not line the pockets of bank executives and shareholders. By stopping rate cuts from reaching borrowers, banks are stopping the economic stimulus which is intended to get Australia‘s economy moving again.

If the cash rate moves up or down so does the mortgage rate – and it is written into the contract so there is np chance the bank can profiteer.

Predictably, not a single Australian bank offers one. 

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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