The Finance Brokers Association of Australia (FBAA) says while it welcomes yesterday’s decision by the Reserve Bank of Australia (RBA) to again keep interest rates at the current level, it is frustrated that practical steps that could help borrowers are not being taken. 

FBAA managing director Peter White AM said the association’s recent research highlighted the enormous financial and mental health pressure being faced by both borrowers and renters, and a two-month interest rate pause isn’t a silver bullet. 

“We have outlined practical and tangible steps that can help borrowers and ease some pressure, but so far we’ve seen no movement,” he said. 

“These proposed steps won’t magically solve the problem but they will give borrowers a fairer go and ensure banks don’t take advantage of those in a vulnerable position.”

Mr White said the FBAA had written to government about these issues and will continue to fight for borrowers. 

He outlined the steps as follows:

“We need a pause on interest rate rises for a further three months until the true impact can be evaluated.

“Banks must be forced to disclose the introductory / new borrower rate, as well as the current existing (back-book) borrower rate.

“There must be a government inquiry into bank practices around the issue of disclosure, to protect borrowers and vulnerable markets.

“The Australian Prudential Regulation Authority must reassess its decision to continue with a 3 per cent loan serviceability buffer for mortgages, and to reduce this to a rate of 1.5 to 2 per cent which is more appropriate in today’s economic environment.”

He said these measures are a pathway forward but require action from government, regulators and lenders.