Commonwealth Bank raises home loans rates

Tuesday 11 August 2009

Article by Mozo

A lender has opted to increase its home loan rates ahead of a possible rise in interest from the Reserve Bank of Australia.

Commonwealth Bank has increased the cost of its fixed-rate deals by 0.6 per cent to 7.59 per cent, while its redraw option rose 0.15 per cent to 5.54 per cent.

The move comes ahead of an expected upward movement from the Reserve Bank of Australia, which could see other lenders follow suit in passing the costs onto consumers.

With the lender reducing its fees for being overdrawn and missing payments, it could be looking to ensure it does not lose income by protecting what it receives from home loans.

It was recently suggested there is a lack of competition in the sector, with University of New South Wales professor Frank Zumba telling the senate that lenders could now act as a "cosy club" and protect their interests, according to the Herald Sun.

Meanwhile, Commonwealth bank recently revealed it is supporting Midnight Basketball Australia, helping "at risk" youths aged 12 to 18.

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