COMMONWEALTH Bank of Australia (CBA) has raised its standard variable home loan rate by 35 basis points - up 10 points on last week's official cash rate rise. According to Ross McEwan of the Reserve Bank of Australia, the bank's retail chief, said the bank could no longer absorb the increased cost of its own borrowings.
"Unfortunately, the volatility in global markets remains and we have seen funding costs continue to increase, particularly since February as funding from global markets has become tighter and as a result more costly.''
Mr McEwan noted the Reserve Bank's warning last week that banks may have to cut back on funding if international markets tighten further.
"Despite this latest increase, which can be directly attributed to the increased cost of funding experienced by all banks, we are still maintaining a balance between the needs of shareholders and customers by continuing to absorb a significant portion of the additional costs being incurred.''
Other major banks included Westpac, National Australia Bank, ANZ and St George are also tipped to raise home loan rates this week.
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