Business

Banks can pass on cut: Analysts

Kieran Salsone

BANKING analysts say the big four have plenty of room to lower interest rates if they choose to.

The Reserve Bank cut the official cash rate to 3.25 per cent on Tuesday, but the big four banks have not yet made a move to lower their rates.

Independent banking analyst Martin North says the gap between the RBA's official cash rate and the average mortgage rate is now much larger than it was before the Global Financial Crisis.

"The actual real interest rate for a household is 150 basis points or more higher than it was pre-GFC, and all of that relates to margin improvement at the banks, the range of risk changes that have happened, and the fallout from the global financial situation," he said.

"But in absolute terms mortgage rates are still not that low."

Read more at ABC news online.

Topics:  banks, cash rate, interest rates, mortgages, rba




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