While nearly all prominent banks made sure to implement the Reserve Bank’s last two rate cuts, we’re nearing the point where these reductions might not be fully extended to customers.

There’s no obligation for lenders to follow the RBA’s lead on interest rates.

“Banks usually act quickly at first, but they may start holding back as the cycle progresses, particularly when they need to safeguard their profit margins,” said Mozo personal finance expert Rachel Wastell last week.

In 2019, only 9 percent of lenders fully applied the third cut in October. The following month, almost half refrained from offering any relief.

A similar scenario is unlikely today, assuming we do get a cut, just because rates got to such a high level (and borrowers were, of course, more than happy to pass on all of the RBA’s 13 hikes in the last tightening cycle).

But Wastell said it’s getting to the stage where borrowers need to keep a close eye on their banks.

”That means the next cut, which now does seem the most likely outcome of the RBA meeting (today), could be the last one borrowers can rely on to flow through in full,” Wastell said.

“The further we go into a cutting cycle, the more important it is for borrowers to watch their bank closely. The best deals still go to those who compare.”