John Symond says only 50-basis-point RBA interest rate reduction will cut it for borrowers

Aussie Home Loans executive chairman John Symond has warned a standard 0.25 percentage point easing by the RBA at its May meeting would not be enough, given the banks have lifted home loan rates since the last cash rate cut in December.

“We have a situation where since Christmas we have had two increases by the banks out of cycle. So, 25 basis points is just playing catch-up for the punter,” Symond suggests.

“If the Reserve Bank wants to make a difference and instil confidence, they now have to go more than 25 basis points and go 50 basis points,” Fairfax Media reported Symond as saying today.

Last month the Aussie Home Loans founder said the RBA was “a bit out of touch by not accepting that parts of the economy, especially small businesses, is doing it really tough at the moment”.

“As well as the Australian economy has performed relative to other economies, we could easily get into the situation where the economy could stall,” warned Symond.

“We need an injection of good news and an injection of confidence – the best way to do that is to start dropping interest rates.”