CommBank and ANZ hike home loan rates, NAB last bank standing
Both the Commonwealth Bank and ANZ have announced interest rate hikes on their variable home loan ranges today, in a trend that sees the big banks cave to funding pressures and pass added costs onto customers.
CommBank announced that all its variable home loan rates would increase by 15 basis points, effective from 4 October 2018. For owner occupiers, this means the CBA standard variable home loan now comes with a rate of 5.37% p.a. for principal and interest repayments, or 5.92% for interest only repayments.
ANZ announced it would increase variable interest rates for by 16 basis points, effective 27 September 2018. This brings the standard variable rate to 5.36% for owner occupiers making principal and interest payments, and 5.91% for interest-only.
Both banks reiterated that the reason for the rate changes was continued funding pressure.
“Over the past six months, we have seen funding costs increase significantly, driven primarily by a rise in the 90 day Bank Bill Swap Rate. These changes have increased the cost of providing loans to our customers,” explained Angus Sullivan, Group Executive Retail Banking Services Commonwealth Bank.
“We have absorbed these higher funding costs over the past six months in the hope that they would ease. Unfortunately, the costs have remained high and it is now expected that they will remain elevated for the foreseeable future.”
ANZ Group Executive Australia Fred Ohlsson said that, “This was a difficult decision given we know the impact rising interest rates have on family budgets. The reality is it is more expensive for us to fund our home loans on wholesale markets and we also needed to balance the needs of all stakeholders.”
ANZ clarified that there would be no change to the interest rates of more than 70,000 current home loan customers in regional areas where drought has been declared.
Following Westpac's announcement of a 14 basis point rate rise across the board last week, ANZ and CommBank’s move isn’t surprising to those who’ve been paying attention.
“It’s certainly not surprising to see the other big banks follow in Westpac’s footsteps and announce rate rises. The big banks tend to move in step with things like this, and it was only a matter of time,” said Mozo Data Manager, Peter Marshall.
“Now, it’s a question of when NAB will follow suit, but I think it will be sooner rather than later.”
If your home loan just went up, it might be time to think about refinancing to a better deal. Head over to our home loan comparison table to see what’s available.