Westpac stands by higher home loan rates

Westpac’s chairman has defended the home loan interest rate increase the bank made earlier this month and has suggested there will be no backing down to pressure to offer cheaper home loans.

Ted Evans said the bank had already absorbed some of the costs of higher funding itself before it chose to raise its variable home loan rate by 45 basis points to 6.76 per cent, the Australian Associated Press reports.

According to the news provider, Mr Evans was unfazed by the criticism levelled at Westpac for being the major bank with highest home loan rate. He added that a range of interest rates across banks were allowing customers to compare home loans and work out the best deal for them.

"Competition in the markets will ensure that power is not abused, and as has been demonstrated again in recent weeks, such competition is alive and well in Australia," he said.

This week a study by the audit body Deloitte found that non-bank lenders were now in a position to challenge the major banks in the mortgage market by offering competitive home loans.

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