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๐—•๐—ฎ๐—ป๐—ธ๐˜€ ๐—ฃ๐—ฎ๐˜†๐—ถ๐—ป๐—ด ๐—–๐—น๐—ผ๐˜€๐—ฒ ๐—”๐˜๐˜๐—ฒ๐—ป๐˜๐—ถ๐—ผ๐—ป ๐˜๐—ผ ๐—ฅ๐—ถ๐˜ƒ๐—ฎ๐—น๐˜€โ€™ ๐—›๐—ผ๐—บ๐—ฒ ๐—Ÿ๐—ผ๐—ฎ๐—ป ๐—ฅ๐—ฎ๐˜๐—ฒ๐˜€

If you've ever wondered how banks decide their home loan interest rates, Australia's competition watchdog, the ACCC, has outlined the process following an inquiry into the retail deposits market.

Often, a โ€˜trigger eventโ€™, such as a change to the cash rate, leads to an internal review of a bank's interest rate pricing, although the bank may also review its rates based on a schedule, according to the ACCC's report.

Regardless of what causes the review, the ACCC said a very similar decision-making process is used with interest rate decisions for home loans and retail deposit products (such as savings accounts) and that banks pay close attention to their rivalsโ€™ rate decisions.

โ€œBanks, regardless of size, typically consider the interest rates of major banks [i.e. the big four banks] when setting interest rates,โ€ the ACCC said.

โ€œGenerally, the major banks tend to refer to a narrower set of banks in their pricing papers relative to the comparisons undertaken by mid-tier banks and mutuals. For example, the pricing papers of major banks
largely do not refer to the interest rates of mutuals [i.e. smaller, customer-owned banks], or refer to only a
small number of mutuals from time to time.โ€

Subiaco finance brokers are here to help

Interest rate rises are here, but you donโ€™t have to fear with the right broker on your side.

The team at Sonam Capital are here to empower you through financial knowledge.
Weโ€™ll take the time to get to know you and your unique situation and speak in a
language you can understand, with strategies you can implement for the best possible outcomes.

Nick, Wayne and Amanda at Sonam Capital are your Subiaco finance specialists.

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