The inquiry is meant, in part, to find out why the big four banks have failed to pass on lower interest rates to their home loan customers. The enquiry follows three rate cuts this year, bringing the official cash rate to a record low 0.75%. But, the big four banks have reportedly not been passing on the full rate reductions to customers, often citing funding costs as a reason.
The inquiry will also seek to understand what prevents more consumers from switching to cheaper lenders, considering matters such as consumer decision-making and biases, information used by consumers, and the extent to which suppliers may contribute to consumers paying more than they need to for home loans.
While the focus will be on the entire residential mortgage sector, the emphasis will be on the big four banks, which retain 75% market share. The ACCC will produce a preliminary report by 30 March 2020 and a final report by 30 September 2020.
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