Rates cuts rationed for many borrowers

With NAB leading pricing, and profit margins down in residential lending, and assuming the rest of the market more or less matches the bank's lead, then the pricing dynamics of the turning interest rate cycle are looking unfavourable for business borrowers.

Asked at yesterday's media briefing what reductions in interest rates anyone with a business loan, overdraft, credit card or personal loan could expect next month, Fahour simply ignored the question and recited some prepared lines about the average home loan customer saving $11 a week.

RBA data shows that over the last year mortgage rates increased by 145 basis points: 100 bps due to increases in the cash rate and 45 bps due to additional bank margins.

For anyone on a personal loan the additional margin is 110 basis points; on a credit card, 70bps; a margin loan, 50 bps; and on an overdraft 85 bps.

With the focus on interest rate pricing so firmly on the home loan segment, customers with other types of loans might not be getting much interest rate relief.