Mortgage Lending Gap Since the GFC
Since the GFC struck in 2007, the Reserve Bank of Australia has decreased the official rate by 4.0% from 6.50% down to 2.50%. Over the same time, the average standard variable rate from the big 4 banks has decreased from 8.32% down to 5.92%. A drop of only 2.40%
As consumers this means that Australian borrowers have received approximately 60% of the RBA rate cuts. The banks have retained 40% of the rate cuts in the form of increased profit margins on our loans.
We have analysed changes in Bank Variable rates since the GFC and compared them to changes in the RBA Official Rate. Our findings are shown on the chart below. You can adjust the settings compare individual banks to each other, or to the average of all 4. Our chart can include a discount to the standard variable (of your choice)
The chart only shows the gap between the mortgage rates and the official cash rate. This is not an accurate representation of banks profit margins, as their cost of funds is based on more than just the official cash rate.