Major banks under scrutiny over interest rates

Australia’s competition regulator is keeping a close watch on the major banks after NAB announced its home loan pricing intentions ahead of the Reserve Bank (RBA) decision this week.

NAB said at the weekend that it would price its variable home loan rate in line with the RBA’s rate, the Herald Sun reported.
This alerted the regulator ACCC to the possibility of price collusion among the major banks.

All of the banks followed the RBA by maintaining their mortgage rates at present levels, but all of NAB’s competitors risked being charged with price collusion if they made this known before the RBA announcement.

The Herald Sun noted that NAB’s status as a price leader in the home loan market had meant that its signals to market rivals were more likely to carry influence.

Such news may encourage Aussies to compare home loans in search of the best independent rates. This week, Loan Market Group executive chairman Sam White said that despite the surprise move by the Reserve Bank of Australia to fix the country’s interest rate, mortgage holders may still be subjected to increasing rates in the coming year.

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