12 October 2012 6:42am
UBank has undercut its parent, National Australia Bank, passing on the full 25 basis point cash rate cut announced by the Reserve Bank last week. NAB passed on 20 basis points.
UBank's standard variable mortgage rate falls to 5.57 per cent. Its USaver savings account rate has also been cut by 25 basis points, to 5.46 per cent (including the seven basis point regular savings bonus).
One Wednesday, AMP Bank cuts its standard variable rate by 17 basis points, to 6.7 per cent.
According to figures supplied by RateCity, four of 22 lenders whose rate changes have been published have passed on the full 25 basis point reduction in the cash rate. They are bankmecu, ING Direct, MyRate, Yellow Brick Road and UBank.
The practice of adjusting rates with reference to movements in the cash rate, but not necessarily following these changes, appears to have become well established.
The average rate cut so far is 19.9 per cent.
On Wednesday, Bendigo and Adelaide Bank's chief executive, Mike Hirst, commended ANZ for establishing a separate rate-setting mechanism.
Hirst said: "I applaud ANZ for its approach. They are trying to educate their customers and be transparent about how they set their rates.
"They have had some customer satisfaction fall-out, but good on them for taking a brave decision.
"The industry as a whole has not done a very good job of explaining how banks are funded and what the costs are."