My old Mum, may she rest in peace, had so much good advice for me. Stand up to bullies. Stand up to unreasonable bosses (sometimes they are the same people). Mum's favourite bit of advice? Where God gives rabbits, He gives grass. This was her attempt to get me to have babies quickly. I ignored her, which meant she never got to see her grandchildren.
But her best advice of all? If you don't ask, you don't get. It's stood me in good stead across a range of experiences, from pay rises to marriage proposals.
I'm sharing this advice with you now for a good reason. Here we are, nine days after the Reserve Bank cut the cash rate to historic lows. The federal Treasurer Josh Frydenberg even urged banks to pass on the full cut. In fact, he told even some publications that Australians would not tolerate anything less from banks than the complete cut.
Yet, almost as soon as the words were out of his mouth, ANZ and Westpac stuck their fingers in their ears and started la-la-ing to drown him out. The other two big banks did the right thing, that is, if you call CBA's new standard variable rate for owner-occupiers paying principal and interest of 5.12 per cent and NAB's 5.11 per cent the right thing. Seriously, if you are paying anything with a five or even a four in front of it, you urgently need to change banks. There are non-bank lenders offering rates as low as 3.09 per cent. And two weirdo digital banks offering 2.99 for one year.
So this, my friends, is really a public service announcement. There are just under 6 million mortgages in Australia. That's 6 million contracts with companies that do not have the best interests of their customers at heart. You don't need me to tell you that, you watched the banking royal commission, right? Your bank does not have to cut your interest rate. Banks can just leave you languishing because this a free market and the banks are bandits in that free market.
At the end of last year, the Australian Competition and Consumer Commission released its residential mortgage inquiry. Here's the takeout. One, what the bank press releases say often don't tell the full story (der). Two, the best deals may not be from the big banks. The report also gave top tips on how to get a better deal. (The folks at the ACCC are channelling my mother.)
My public service announcement? Ask the bank for a better deal. You have to ask them yourself.
Here's what I do when the Reserve Bank cuts (and sometimes even when it holds). I ring my bank, more or less straight away. If the reduction has been a quarter of a per cent, I ask for that or better. I even call them out-of-cycle (as in, I don't wait for the RBA to pave the way for me). This time, I didn't even have to specify. My bank cut my rate by nearly half a per cent. (Take that, ANZ and Westpac.) The cut is big enough to pay for our energy bills for the year.
Thing is, most people don't bother to call. They set and forget. But your home loan is not a slow-cooked lamb shoulder. It should be like every other financial transaction you make. Check and check again. Think about how you can get a better deal. If you ask for a cut and don't like the answer, ask to speak to the supervisor. If the supervisor gives you the same answer, leave.
It turns out that at least one of my darling friends, Philippa, far too nice for her own good, has never ever asked the bank to cut her rate. She'd noticed I'd tweeted about ringing the bank. Her experience was pretty much the same as mine.
Philippa: I'd like to ask if we are going to get an interest rate reduction on our mortgage, please?
Nice human: When was the last time you had a rate review?
Philippa: Never? I think?
Nice human: OK, let me put you on hold and I'll conduct a quick review with our pricing team
(Two to five minutes later)
Nice human: I can offer you 3.8 per cent starting now, with a further drop to 3.55 per cent on 25 June, is that OK?
Philippa: Yes, thank you, five stars.
I have since scolded her for her laxness; although five stars for finally getting there. In addition, she now has $1500 extra a year.
In 1989, the legendary Bulletin magazine ran a cover story that claimed "All banks are bastards". It's not that easy for them to be bastards any more (thanks, your royal highness Kenneth Hayne).
Except when it comes to the interest rates charged on credit cards. Then they really are. Those should be our next target. The good news is that fewer of us are using credit cards. The better news will be when those interest rates are in single figures.
Jenna Price is an academic at the University of Technology Sydney.