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Date Published : Thursday, January 10, 2008
One of Australia's largest financial institutions has joined two of its counterparts and raised the interest rates it charges on its home loans.
The Commonwealth Bank of Australia has announced that it will follow in the footsteps of ANZ and the National Australia Bank (NAB) and raise its interest rates by 0.1 per cent from January 11th.
Citing an increase in wholesale funding costs in financial markets, the standard variable rate on all Commonwealth Bank home loans will increase to 8.67 per cent.
Earlier this month, the NAB raised its rates by 0.12 per cent to 8.69 per cent, while ANZ hoisted its mortgage interest rates up 0.25 per cent to 8.54 per cent.
The moves by three of the largest banks in the country to move away from the standardised levels set by the Reserve Bank of Australia are the first in over ten years by any financial institutions.
Ross McEwan, Commonwealth Bank group executive, said: "We have given careful consideration to the size of this increase and while a higher increase could be justified, we believe that the current level of wholesale funding rates will moderate from the high level experienced pre-Christmas.
"This modest increase strikes a good balance between the needs of our customers and shareholders."
Treasurer Wayne Swan said earlier this month that banks should think of their customers before making any further interest rate decisions.
He said: "I would still urge all of the banks to be very mindful of the significant financial pressures on families when making decisions in these matters."
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