Talking to some older folk over the last week about times when interest rates were around eighteen percent and I am reliably told that there are many watching with almost amusement at the goings on in relation to the continued will they/won’t they pass that rate cut onto borrowers guessing game.

Because it was back in their day that a bank not passing on a rate cut was almost the rule, rather than the exception.

And with interest rates getting up to eighteen percent around that time, that was a whole lot of sweat going on!

So that generation can certainly add some perspective to what’s happening in the current times.

But there is one difference now. Thanks to competitors such as non-bank lenders, credit unions and building societies continuing to be a force in the mortgage marketplace, rate cuts are now more routinely passed on in full to borrowers.

And the reality is, this pattern now is largely due to the continuing existence of alternative lenders, combined with people exercising their right to choose.

After the 1990’s, benchmark rates came down by almost two percent after non-bank lenders such as Resi entered the market and have remained lower largely because our sector of the market continues to be around.

Sure – the big banks will continued to be pressured, whether it’s by government, borrowers or through the existence of other alternative lenders to more carefully consider their decision on rates, so that won’t change.

But at the end of the day, borrowers are now in a position where if they don’t like what’s happening, they can take their bat and ball and… move.