Home loan rate 'significantly higher than official cash rate'

The average rate of interest attached to home loans is significantly higher than the Reserve Bank of Australia's (RBA) official cash rate.

Many Aussie property owners were dismayed earlier this month when the country's four major banks – ANZ, Commonwealth Bank, National Australia Bank and Westpac – all increased the rates on their mortgages.

While the hikes did not appear to be too drastic at the time, figures set to be revealed later this week by the RBA are expected to show that the gap between the cash rate and average home loan rates stands at 3.15 per cent, the Herald Sun reports.

It is the first time the gap has widened since 2010 and it is anticipated to be the biggest difference since 1994.

Most of the banks have blamed higher lending costs for the increase and they claim that it is more difficult to secure money from overseas markets.

The majority of economists were surprised that the RBA did not lower the base rate at the start of the month, but now feel that no changes will be made until April or May.

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