 Interest rates a hot topic
Despite the Reserve Bank of Australia deciding to hold official interest rates yesterday, it's a waiting game to see if the banks raise home loan rates, as expected.
The Reserve Bank left the official cash rate unchanged, at 3 per cent for the sixth consecutive month at its meeting yesterday. Rates are likely to rise soon however, if sales and jobs data remains strong.
Banks claim they are battling rising funding costs and are poised to raise mortgage rates no matter what the RBA board does with the cash rate. Andrew Willink, chairman of the interest rate monitoring agency Rate City, said yesterday: "It is likely that banks will move to increase variable rate to some degree in the very near term."
An ANZ spokesman confirmed they had no plans to raise their rates until the RBA made a move. However he did agree that rising funding costs were a pressure.
Commonwealth Bank chief executive Ralph Norris states the bank will change rates depending on funding costs rather than the RBA.
Home loan rates with the major banks remain between 5.7 and 5.8 per cent.
The Treasurer has often been quoted as saying rates will have to rise eventually and that home owners should prepare now.
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