Australia’s banks seem to have embraced the credo that if you are going to tell a lie, you might as well tell a big one. One of the biggest is that when the Reserve Bank lifts official interest rates, the banks have no choice but to pass on the rate rise in full to their home loan customers. This sounds credible on a first hearing, but it simply doesn’t fit with the way banks operate nowadays.
Related documents
Between the Lines Newsletter
The biggest stories and the best analysis from the team at the Australia Institute, delivered to your inbox every fortnight.
You might also like
Rate cut welcome – but borrowers are still behind
The Australia Institute welcomes the Reserve Bank of Australia’s decision to cut interest rates today, but borrowers are still at least 0.25% behind where they should be.
Delayed RBA cut is welcome, but borrowers are still lagging
The RBA has cut interest rates – five weeks too late.
One way to improve the “dumpster fire of dumb stuff” which is Australia’s housing policy
Everyone agrees we need to do something about housing in Australia. But first we need to ask a very obvious, but often ignored question: what is housing is for?