Aussie banks' rate hikes are 'dubious'

The decision made by Australia's major banks to increase interest rates has been labelled as "dubious".

With the Reserve Bank of Australia opting to keep the standard cash rate the same in February, the country's four largest institutions – ANZ, Westpac, Commonwealth Bank and National Australia Bank – all chose to increase the rates on their home loans.

They had claimed that the cost of borrowing money from overseas markets had increased and these additional costs would have to be passed on to customers.

However, one of the world's largest finance houses – the Societe Generale – has suggested that the banks may not be telling the whole truth.

Head of interest rate strategy at the organisation Christian Carrillo said: "The claim that the recent increase in mortgage rates is due to higher funding costs is very dubious," before adding that the banks were merely attempting to protect their high profit margins.

After hearing of the latest round of interest rate hikes, leader of the Australian Bankers' Association Steven Munchenburg urged disgruntled home loan customers not to be afraid to switch their bank account provider.

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