The National Australia Bank (NAB ) has signalled it won’t pass on the recent cut to interest rates made by the Reserve Bank on Tuesday, with the bank keeping its standard variable mortgage interest rate at 5.74 percent.
The Reserve Bank yesterday cut interest rates by a quarter of a percentage point to a 49 year low of 3 percent.
NAB personal banking head Lisa Gray cited the bank’s reason for not passing on the rate cuts as rising costs in funding.
“Whilst customer interest rates have been falling, the actual cost of banks providing a mortgage has increased significantly since the credit crisis hit in mid-2007,” she said in a statement.
“Our pricing needs to responsibly reflect these increased funding costs.”
The Commonwealth Bank has signalled it will pass on the rate cuts, but only by 10 basis points, compared to the Reserve Bank’s 25 basis points.
Prime Minister Kevin Rudd has urged all the big banks to pass on the rate cut, to help struggling families.
“This decision is disappointing and I’d urge them to reconsider,” Mr Rudd told ABC Television.
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