The big four banks have made it “unnecessarily difficult and more costly” for Australians to find the cheapest home loan rates, the consumer watchdog has found.

An Australian Competition and Consumer Commission (ACCC) inquiry also found that “maintaining profitability was a key consideration” of the big four banks when considering if and when to pass on Reserve Bank cash rate cuts to their customers.

According to the ACCC’s Home Loan Price Inquiry interim report released on Monday, customers of the big four banks with loans that were more than five years old paid, on average, 40 basis points above what customers at the same banks with new loans were paying.

The report calculated that for a loan of $200,000, the average size of a loan more than five years old, a customer could have saved $850 in interest in the first year if they had refinanced to obtain a new loan rate at the same bank.

The interim findings, which assessed prices charged for home loans by the big four banks between 1 January 2019 and 31 October 2019, also show it took between 9 and 21 days for the banks to implement their rate changes after announcing them – a lag period which it found the banks profited off.

The watchdog singled out Commonwealth Bank for “consistently having a significantly longer lag period than the other big four banks”.

In April, the Reserve Bank left the cash rate unchanged at a record-low 0.25%.

Rod Sims, ACCC Chair, told Guardian Australia the delay in rate cuts coming into effect “certainly helps the revenue” of the banks.

Sims said the banks’ focus on maintaining profitability of their home loans was largely due to the plummeting interest rates their customers were earning on deposit products.

Reluctant to cut their deposit return rates as interest rates neared zero, Sims said the banks anticipated lower profits “which they aimed to recover by not always fully passing through cash rate cuts to their mortgage customers”.

However Sims said the cost for banks to fund their loans over 2018 and 2019 “came down more than the rates of mortgages”, reductions he believes could have funded further discounts for mortgage customers.

Sims also urged Australians to go to several banks to compare home loan products, and said Consumer Data Right – an initiative to allow customers better access to their banking data to use online comparison tools to switch to better products – would help bring transparency to home loan prices.

“This is the biggest financial transaction you’ll go into, yet it’s pretty hard to work out what the actual price is,” he said.

“The more loyal you are, on average, the more you are paying.”

In October 2019, treasurer Josh Frydenberg directed the ACCC to conduct the Home Loans Price Inquiry in response to growing frustration at the banks for failing to pass on rate cuts to mortgages.

The full report, which will also examine impediments to consumers refinancing to alternative home loan suppliers, is expected in November.