While just about every major bank made a point of passing on the Reserve Bank’s previous two rate cuts, we’re getting close to the stage where they might not be passed on in full to customers.

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

“Banks tend to come out swinging early but can start holding back as the cycle continues, especially once they’re under pressure to protect their margins,” Mozo personal finance expert Rachel Wastell said last week.

Back in 2019, only 9 per cent of lenders passed on the third cut of the year in October in full. A month later, nearly half didn’t pass on any relief at all.

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.”