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Date Published : Monday, April 07, 2008
Some of the major banks and lenders across Australia may increase the interest rates they charge on their variable rate home loans despite the Reserve Bank halting rate rises, an industry expert has predicted.
Earlier this month, the Reserve Bank of Australia (RBA) decided to hold interest rates at 7.25 per cent - their highest level for over 12 years - after two successive rate rises and four in the last seven months.
However, despite that decision, the Daily Telegraph reports a number of the major mortgage lenders across the nation are pondering independent rate rises, in order to recoup losses from the global credit crunch and a housing slowdown in some areas of the country.
In fact, just four days after the RBA decided to keep rates level, both Commonwealth Bank and St George Bank increased rates on variable rate home loan products.
Commonwealth Bank increased rates buy 0.12 per cent to 9.44 per cent, while St George Bank's mortgages now charge 9.47 per cent.
Analyst Dale Gillham, from Wealth Within, told the publication: "The banks are protecting their bottom line because the cost of their money has gone up more than what the RBA rates have gone up.
"Weeks ago when I was chatting with the big banks, several economists said they were more than 30 basis points away from those margins.
"So there is probably another 10 or 20 basis points to come, independently of the RBA and I would say it is very likely they will go this week.''
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