Reserve Bank cuts interest rates

[Dubstep Dookie]

bottom line is nobody can do anything about it and the banks know it.

Unlike the US central bank, ours is an independent body, but the banks are wielding more and more power. Supposedly this rate cut was made so big because the reserve bank expects the banks not to pass on the full cut, but are hoping they pass on enough of the cut to stimulate consumer spending.

So as media becomes more concentrated in it's ownership, and thus political influence through corporate progonda increases, so to does the influence of the private banks on the countries economic decisions.

We are still a long way behind the US, but big business is having more and more influence on the running of the country.

Isnt greed a wonderful thing?

Extrapolate the last 20 or 30 years into the future. We aint seen nothing yet!

[Loui Tufga]

bottom line is nobody can do anything about it and the banks know it.

Unlike the US central bank, ours is an independent body, but the banks are wielding more and more power. Supposedly this rate cut was made so big because the reserve bank expects the banks not to pass on the full cut, but are hoping they pass on enough of the cut to stimulate consumer spending.

So as media becomes more concentrated in it's ownership, and thus political influence through corporate progonda increases, so to does the influence of the private banks on the countries economic decisions.

We are still a long way behind the US, but big business is having more and more influence on the running of the country.

Isnt greed a wonderful thing?

Extrapolate the last 20 or 30 years into the future. We aint seen nothing yet!

I blame Big Kev.......

[mightytiges]

The banks make something like $12m every day they hold off cutting their rates. They of course think we actually believe them when they say they have to wait to lower mortgage rates and by less than the reserve bank rate cut yet deposit rates are lowered instantly and by the full 50 basis points.

[Francois Jackson]

The banks make something like $12m every day they hold off cutting their rates. They of course think we actually believe them when they say they have to wait to lower mortgage rates and by less than the reserve bank rate cut yet deposit rates are lowered instantly and by the full 50 basis points.

yep spot on

one way the banks lose money is when you switch lenders every few years.

The thing is a lot of people complain and whinge but rarely do they make the switch.

How anyone has a loan with CBA and Westpac still is beyond belief.

[Penelope]

it costs money to switch loans, one way or another.
as for changing banks, if they all behave the same, who do you change to. you single out com banks and westpac yet the con back dropped rates more than NAB? ANZ are holding off and westpac will announce today their meagre cut.

they are all tarred with the same brush and have one thing in mind only, making as much money as possible. they all act the way they don knowing that even if people were to swap banks, they are the main seats on the merry go round round and what they lose with hand they will gain with the other.

just face it, they all pure scum

[Dubstep Dookie]

The banks make something like $12m every day they hold off cutting their rates. They of course think we actually believe them when they say they have to wait to lower mortgage rates and by less than the reserve bank rate cut yet deposit rates are lowered instantly and by the full 50 basis points.

I don't think they think that we actually believe them. It's more that they know we can't do anything (much) about it, and they don't really care. The PR machine for each bank of course goes into action to defend it and manage 'perceptions' but at the end of the day anything goes and they really don't GAS about the reality beyond raking up more and more wealth.

Over in the coming years what we will see is a complete shift in policy with the banks raising and dropping there rates with zero regard to the Reserve Bank, which will become obsolete. The banks will increase rates to the point where the majority of the population JUST afford repayments, without crippling the population and hence their own source of revenue.

That's already happened to an extent with utilitiy bills and groceries, but those two will get worse too.

Sure is a different Australia to 20 years ago. We've all let ourselves be bent over. Extreme capitalism at its finest. Legalised theft.

[WilliamPowell]

How anyone has a loan with CBA and Westpac still is beyond belief.

Not really why would we change? Have a fantastic deal with the CBA

Locked into a nice little fixed rate that is less than the current fixed & variable rates and is less than the fixed rate we came out of when it was up for renewal. So because of that we've kept the repayments the same based on the higher rate which has put us years ahead on repayments 

Seriously, smart planning and a fixed rate can give you massive advantages 

[Francois Jackson]

it costs money to switch loans, one way or another.
as for changing banks, if they all behave the same, who do you change to. you single out com banks and westpac yet the con back dropped rates more than NAB? ANZ are holding off and westpac will announce today their meagre cut.

they are all tarred with the same brush and have one thing in mind only, making as much money as possible. they all act the way they don knowing that even if people were to swap banks, they are the main seats on the merry go round round and what they lose with hand they will gain with the other.

just face it, they all pure scum

i agree 100% but comparing purely on interest rates Westpac and CBA are the most expensive and have always been more expensive than NAB and to some point ANZ. Yet they are the most sought after.

IMO Bank of Melb and Homeside lending are the best 2 by far

As for switching costs well not anymore. Just admin charges remain now.

As for your fixed rate WP obviously thats a different cattle of fish, of course you can end up on top but 97% of Aussies lose out.

In all honesty Wayne Swan says it religiously to plead with your bank to get a better rate yet no one does it. The silly call centre girl are not the ones to hand it out, must go straight to complaints department

I have a comparable rate with Homeside/BOM but only because i tell them im leaving. The rate increase outside of the RBA few months ago wasn't passed on to me at all, because i made the call.

Anything to get ahead of those thieves il do it so should you guys.

[WilliamPowell]

As for your fixed rate WP obviously thats a different cattle of fish, of course you can end up on top but 97% of Aussies lose out.

I don't think it would be 97% but I understand your point

Part of it certainly comes down to timing and having a feel for what is going to happen in the market place.

But having said that when we built our house (13 odd years ago) I made the call for to lock in a fixed rate, simply to give us the certainty regarding our repayments and knowing they wouldn't  change for a fixed period of time = interest rate changes don't hurt us. We have kept doing that and haven't looked back - key is to not lock in for a long term 

We started out with a 30 year mortgage; now based on the numbers we will have the thing paid off in less than 9 years. And BTW we haven't made one extra repayment all we've ever done is pay the instalments as they fall due

 

[Penelope]

by admin charges do mean establishment fees Daniel? they can be quite substantial or have they been scrapped as well.

One of the criticisms of making it easier to change banks by abolishing exit fees is that banks would just recoup their money elsewhere.

Now that you mention it, the fist step just recently in the banks adjusting their interest rates independently of the reserve bank co-inside, roughly, with the abolishing of exit fees.

sometimes there are other factors besides interest rates in determining which bank you go with. westpac for eg are one of the few that offer low doc loans, something those that are self emplyed often require. nor do all banks offer interest only loans.

in our case as well, their insurance premiums  they offered for borrowers were better than any we could get elsewhere.

dont get me wrong, im not a west pac fan boy, but the set up we have suits us, at the moment. i also have a business ac with anz and my eftpos facility and settling account with nab. in each case it was what suited me at the time.

Banks are the cornerstone of Capitalism, and they have us all by the short and curlies. the whole concept of regularly swapping and changing banks over 1% and less interest rates differences is flawed and just doesnt work in practice, sadly.

What really poos me is the whole GFC was largely due to the actions and subsequent collapse of banks/lending institutions, yet it was taxpayers the world over that had to bail them out, just for them to continue on their deregulated, greedy ways.

The sad and dangerous irony in the system is that the largest capitalist country is in now in debit to the largest communist country in the world, to such an extent that if china were to call in it's debts, the US would be bankrupt overnight.

 

[Francois Jackson]

by admin charges do mean establishment fees Daniel? they can be quite substantial or have they been scrapped as well.

One of the criticisms of making it easier to change banks by abolishing exit fees is that banks would just recoup their money elsewhere.

Now that you mention it, the fist step just recently in the banks adjusting their interest rates independently of the reserve bank co-inside, roughly, with the abolishing of exit fees.

sometimes there are other factors besides interest rates in determining which bank you go with. westpac for eg are one of the few that offer low doc loans, something those that are self emplyed often require. nor do all banks offer interest only loans.

in our case as well, their insurance premiums  they offered for borrowers were better than any we could get elsewhere.

dont get me wrong, im not a west pac fan boy, but the set up we have suits us, at the moment. i also have a business ac with anz and my eftpos facility and settling account with nab. in each case it was what suited me at the time.

Banks are the cornerstone of Capitalism, and they have us all by the short and curlies. the whole concept of regularly swapping and changing banks over 1% and less interest rates differences is flawed and just doesnt work in practice, sadly.

What really poos me is the whole GFC was largely due to the actions and subsequent collapse of banks/lending institutions, yet it was taxpayers the world over that had to bail them out, just for them to continue on their deregulated, greedy ways.

The sad and dangerous irony in the system is that the largest capitalist country is in now in debit to the largest communist country in the world, to such an extent that if china were to call in it's debts, the US would be bankrupt overnight.

good points Al. In fact i never believed it or was just ignorant to it all but you and DD are right.

I believe the banks are recouping their losses on the abolishment of exit fees, through increase in rates.  Establishment fees are rarely used, most of them waive this and just charge an annual fee. To the banks credit they haven't made a mockery of the banning of exit fees, by creating another fee, but like i said they have had a win with their rate rise outside of RBA.

I don't know much about being self employed, but absolutely its not features and benefits, but to every day Australians it is. I meet people all the time that are so ignorant, or just dont care.

I don't particulary like any of the banks but at least some reward loyalty in customers, and i just hope people get the message they they can walk or plead with a rate cut.

So true DD the banks know it, Swan knows it, everyone knows the greed in banks always win in the end and IMO things will get worse in reference to raising rates. The RBA will cease to have any influence at all IMO.

Have you guys seen Wall Street 2 and Margin Call?

[Dubstep Dookie]

Slave society.

Are we really free?

Are we told to be?

[one-eyed]

RBA has cut official rates by another 25 basis points. The official rate is now 3.5%.

http://www.heraldsun.com.au/news/mortgage-relief-as-the-reserve-bank-of-australia-cuts-rates-in-june/story-e6frf7jo-1226384725200

[one-eyed]

7NewsMelbourne twitter:

"BREAKING: RBA interest rate cut by 0.25 per cent to 3.25 per cent"

[mightytiges]

Down to 3% now after yesterday's cut. The RBA should've done it on Cup Day rather than waiting another month. Anyway I won't hold my breath waiting for the banks to follow the RBA's lead .