Australia's big four banks are facing a new request for their failure to pass on a full official interest rate cut constructed by the central bank.
The cashier, Josh Frydenberg, has asked the competition watchdog to investigate why many mortgage lenders are being charged interest well above the 0.75% cash rate.
The higher prices have led to allegations of price hikes from the banks ̵
Rod Sims, chairman of the Australian Competition and Consumer Commission, said at a media conference that a mortgage loan was the "most important" financial transaction most would ever make.
"We want to make sure that customers, consumers, society, really understand exactly how banks make their decisions, why they make their decisions," he said. "There is often a lot of confusion among customers in relation to the big difference between the overrun rate , the variable that they see, and what people actually pay. "
The ACCC would investigate why banks put prices where they do and make them more accountable for those decisions. It will also try to make it easier for consumers to switch Sims said they should become "active players" in the market instead of signing for a mortgage and then not review the terms until it is paid.
"I think you're better off be an active player in the market if you are a consumer, and hopefully the work we do will give consumers more information on how they can work with the mortgage rate markets. "Confidence in Australia's banks, after the Royal Commission on Banking Standards lifted the lid on a number of misstatements.
" I actually called the CEOs of the four big banks yesterday and told them that this can actually help clear the air, " he said. "But at the same time, you know, they are defending their update and will continue to do so."
The cashier said that banks must explain how to balance the competing needs of shareholders and customers.
The official cash rate is at a record low of 0.75% after the Reserve Bank of Australia cut interest rates three times this year, but on average the four major banks provided only 75% of the total reduction to their customers.
"There are a number of smaller lenders who did not actually waste time transferring these interest rates in full, "Frydenberg said.
" If the four major banks had gone ahead with these 75 basis point reductions, someone would a $ 400,000 loan would be better than $ 500 a year better in lower interest payments. "
ANZ boss Shayne Elliott said Monday the banks had not properly explained why they had not continued the Reserve Bank interest rate cuts to credit customers and welcomed the the Competition Guard's inquiry.
"The inquiry is a great opportunity to provide facts in what is a complex space, and we hope it will give the public renewed confidence in the way their mortgages are priced," Elliott said.
The ACCC's preliminary report is due by March 30 next year, six months before the final report.