The RBA has met expectations with a 0.25 percent rate cut. Wizard Home Loans had already cut its mortgage rate in anticipation of this and NAB and ANZ have said that they will do so as well. Given that mortgage rate rises outstripped the RBA rate increases for most of this year, even a full pass-through can hardly considered as a bounce back but it is a step in the right direction.
I am on ABC Radio National tonight (at 6pm for an hour long discussion on all this and John Hewson will be on too). But so long as home mortgage rates are going down I am going to relax someone on the pressure to do something about competition in that market. That doesn’t mean the issue has gone away, it is just that the pressure is off. If the government can regulate by words successfully (that is, noodge), who am I to argue with that?
Anyhow, in the meantime, we have set up a web-site aussiemac.org devoted to the debate and it will record any on-going developments that might come by. You might also be interested in our on-going calculator on that site of the building cost to the evaporation of the RMBS market in Australia (for which today’s news changes nothing). That cost at the time of this writing was over $2.2b and counting.
[Update: All four major banks have followed Wizard].
[Update 2: Here is the Radio National discussion].