 Home loan rates go up
The Big Four banks in Australia have today all moved to raise standard variable home loan rates.
ANZ went first, this morning announcing they would be passing on the full 25 basis point hike in rates from the Reserve Bank. This was not unexpected. Since the RBA's announcement on Tuesday that official interest rates were rising to 3.25% all eyes have been on mortgage interest rates.
So, the ANZ bank has raised their standard variable rate by 25 basis points to 6.06 per cent, effective October 12. This increase of 25 basis points adds about $40 a month on a $250,000 mortgage over 25 years.
Next off the blocks was National Australia Bank. NAB said it will increase standard variable rates by 25 basis points to 5.99 per cent.
Westpac and Commonwealth Bank are the latest to announce rate hikes, raising standard variable rates by 25 basis points. "While improving market conditions have prompted this increase, the majority of Commonwealth Bank variable rate home loan borrowers are already making repayments at levels above the new minimum requirement," CBA retail banking services executive Ross McEwan said.
Many banks will raise the interest rates on deposit accounts, saver accounts and Business Online Saver accounts by 0.25 per cent from Tuesday.
The same old excuse has been paraded about: higher funding costs. The banks blame the higher costs of funding for the rate hike.
Improving job figures have surprised many financial forecasters and could prompt many more rate cuts over the coming 12 - 18 months.
Economists are united in their predictions of another rate rise when the RBA meets again on the first Tuesday of November.
A spokesperson for NAB said that even with these latest increases, home loan rates remain at historically low levels.
Financial markets now predict the cash rate could increase by a total of 2 per cent by this time next year. This would take the official cash rate to 5 per cent, and home loan rates could rise to more than 8 per cent. A full 2 per cent rate increase on today's mortgage rates would amount to more than $300 extra per month on a $250,000 mortgage.
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