A second bank under the Bank of Queensland (BOQ) umbrella has refused to pass on the Reserve Bank of Australia’s (RBA) February rate cut, adding to growing frustration among borrowers. BOQ Specialist, a subsidiary catering to professionals like doctors and accountants, announced that its variable home loan interest rates would remain unchanged, mirroring the stance of its sister brand, Virgin Money.
“BOQ Specialist regularly reviews savings and home loan rates to ensure they balance the needs of savers and borrowers and are competitive in the market,” the bank stated on its website.
Customers Express Outrage
Disgruntled customers took to social media to voice their frustration, with many vowing to refinance.
“Here to help but you are pocketing the savings from the cash rate drop—what a joke,” one customer posted. Another added, “Why don’t you help people by passing on interest rate cuts?”
One BOQ Specialist customer, who wished to remain anonymous, shared their disappointment with this masthead.
“Finally getting relief from high interest rates, only to find out my bank wouldn’t pass it on, was soul-destroying,” they said. “I’ll be refinancing at the next opportunity.”
Government and Market Reactions
Treasurer Jim Chalmers publicly criticized BOQ CEO Patrick Allaway for failing to pass the rate cut to Virgin Money customers, calling the decision “very disappointing.”
“Banks and other lenders shouldn’t treat their customers like mugs,” Chalmers said, urging borrowers to seek better deals elsewhere.
Meanwhile, Graham Cooke, head of consumer research at Finder, noted that many Australian homeowners feel let down.
“Every extra day without a cut leaves Aussie homeowners with tighter budgets,” he said, emphasizing that refinancing could save borrowers thousands of dollars annually.
BOQ Defends Its Stance
A BOQ spokesperson defended the bank’s position, stating that while BOQ itself had passed on the cut, Virgin Money and BOQ Specialist had historically offered lower-than-market rates to stay competitive.
“The decision to realign rates with those of our competitors ensures we can continue to support our customers effectively,” the spokesperson said, acknowledging the frustration but emphasizing the need for financial sustainability.
Virgin Money also doubled down, justifying its decision by pointing to funding costs and overall market conditions. However, customers noted that while Virgin Money refused to pass on the RBA’s rate cut, it had promptly slashed interest rates on its savings accounts by 0.35%, exceeding the RBA’s 0.25% reduction.
A Market Divided
More than 100 lenders have already passed on the RBA’s 0.25-percentage-point cut, reducing the official cash rate to 4.10%. Commonwealth Bank, ANZ, NAB, and Westpac were quick to implement the full reduction, leaving BOQ Specialist and Virgin Money as notable outliers.
With BOQ’s best variable rate at 5.93% since March 7 and Virgin Money’s at 6.44% for customers with at least a 40% deposit, many borrowers are now actively seeking better deals elsewhere.
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