SMH has reported that banks have warned further increases in variable home loan interest rates if global credit market conditions do not improve. Westpac Banking Group Ltd today lifted its home loan rate, exceeding the official rate rise from the Reserve Bank earlier in the week to 30 basis points. Also warning further adjustments may be needed if markets do not begin to stabilize.
Westpac's standard variable mortgage rate will rise to 9.27 per cent next Tuesday, March 11, from 8.97 per cent.
The move is larger than the 25 basis point rise in official interest rates to 7.25 per cent engineered by the Reserve Bank of Australia (RBA) on Tuesday.
Acting group executive of Westpac's Consumer Financial Services - Jeremy Dean said the decision to raise rates by more than the RBA was a difficult one.
"We are extremely mindful of the impact of interest rate increases on our customers," he said. "We know that this rise will stretch many family budgets." "However the cost of wholesale funding continues to rise."
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