Finance company GE Money is still charging homeowners mortgage rates of up 10.25 per cent, despite the Reserve Bank slashing the Official Cash Rate.
The central bank has dropped the OCR by 2.5 percentage points in less than two months, causing home loan rates to tumble.
Reserve BankGovernor Alan Bollard has criticised funders for not passing on all of the reduction, but most have dropped their rates significantly.
However GE Money, which announced in October it was pulling out of the home loan and car finance markets in Australia and New Zealand, has not moved at all on the latest round of cuts.
Spokesman Tristan Everett said the company hadn't been able to make a decision to drop its rates because of turmoil in the world credit markets.
GE Money relied entirely on wholesale funding which was still very expensive, he said.
"For us the credit spread is widening immensely at the moment because of the volatility in the market."
Mr Everett said GE Money would be making a decision on Monday about its rates.
He said it planned to continue servicing its 35,000 existing home loan customers, and was not trying to discourage them by keeping rates high.
But industry sources were sceptical about the explanation, saying other lenders backed by wholesale funding were able to offer lower interest rates.
One said the mortgage industry had been lobbying GE Money to lower its rates. "Frankly it's causing us grief with our borrowers because it means we're out of the market.
"The cynic would suggest they're margin grabbing."
