Related articles
Date Published : Tuesday, January 15, 2008
The current theme of banks increasing their home loan interest rates may not grab the attention of many homeowners but there is a major reason why it should.
In recent weeks, a number of Australia's biggest financial institutions - including National Australia Bank and Commonwealth Bank - have raised interest rates charged on variable home loans away from that set by the Reserve Bank of Australia.
As a result, homeowners with such mortgages will have to pay more of their monthly income to banks and lenders, adding to the post-Christmas tightening of financial purse strings.
The reason behind the shift is the US credit crisis. A number of Australia's largest banks, including ANZ and Westpac, invested in US mortgage group Countrywide Financial, which - along with a number of others - is on the verge of collapse. The banks say that the interest rate increase will be used to cover the losses incurred from this.
Rhys Haynes, of news.com.au, said: "The global credit crisis has since arisen because some of the world's biggest investment banks have been hit through the lines of credit they have extended to sub-prime lenders, or other indirect exposure to them."
Australian Consumers Association spokesman Christopher Zinn told the Daily Telegraph that some people, especially those in western Sydney, may be forced to make life-altering decisions in order to get their finances on track.
"They are the people who will feel this double whammy, they have the largest mortgages in proportion with income and have the biggest commute. So it's not a great start to the year."
The new year may be only a couple of weeks old but home loan rate rises will become a feature of 2008. Those that have not heard of them yet, will do.
Find and apply online for loan deals.
- Finance News
- Credit Cards
- Banking News
- Loans News
- Insurance News
- Investments News
- Insurer reveals top tourism destinations in Victoria
A motor and travel insurance provider has revealed the results of a poll it carried out to find out the most popular tourist attractions in Victoria.
- Woolworths plots growth
Woolworths, the retail giant responsible for the Everyday Money credit card, has revealed details of its growth plans.
- Mortgage rate cut 'unlikely'
Many mortgage and loan customers might be paying attention next month to see what decision the Reserve Bank of Australia makes on the interest rate.
- More mortgages please, says treasurer
There could be a greater level of investment in residential mortgages in Australia, if the federal treasurer gets his way.
- Banks becoming more selective, says ANZ
Despite confidence in the Australian banking system coming relatively unscathed through the global credit crunch, many institutions have become more cautious in their lending.
- Woolworths plots growth
Woolworths, the retail giant responsible for the Everyday Money credit card, has revealed details of its growth plans.
- Credit card interest rates 'remain constant'
A newly published survey of credit cards on the Australian market has highlighted that interest rates have held firm on the majority of offers.
- Credit card spending 'cools down'
Plastic credit cards in Australia have no danger of melting through over use as consumers begin to tighten their belts, new figures have shown.
- Protect yourself from credit card fraud
Almost half a million Australians were the victim of identity theft last year and there are a number of ways to protect yourself, your identity and your hard-earned cash, it has emerged.
- Nervous Australians could change their attitudes toward debt: RBA
The challenging economic environment could lead to Australians are not splashing their cash and building up a nest egg, according to Reserve Bank of Australia (RBA) governor Glenn Stevens.
- Australia to weather the storm, says IMF
Australia's economy is in a healthy enough state to see it make it through the global downturn in one piece.
- Australia to weather the storm, says IMF
Australia's economy is in a healthy enough state to see it make it through the global downturn in one piece.
- Public and government 'confident in face of global economic turmoil'
As the global economy takes a battering, Australians could be forgiven for fearing the worst when it comes to their own nation's money matters.
- Public and government 'confident in face of global economic turmoil'
As the global economy takes a battering, Australians could be forgiven for fearing the worst when it comes to their own nation's money matters.
- PM warns crisis is 'far from over'
Prime minister Kevin Rudd has warned the country that the global financial crisis still has a long way to go before it is over, it has emerged.
- Mortgage rate cut 'unlikely'
Many mortgage and loan customers might be paying attention next month to see what decision the Reserve Bank of Australia makes on the interest rate.
- More mortgages please, says treasurer
There could be a greater level of investment in residential mortgages in Australia, if the federal treasurer gets his way.
- Banks becoming more selective, says ANZ
Despite confidence in the Australian banking system coming relatively unscathed through the global credit crunch, many institutions have become more cautious in their lending.
- Retail banks - champing at the bit?
When many people come to take out a loan or a mortgage, their first inclination might be to turn to their own bank. On shopping around, they could find that better deals lie elsewhere.
- Global credit crunch 'will affect your everyday life'
As the credit crunch begins to bite in certain parts of the globe, many Australians might be wondering what it means for them.
- Insurer reveals top tourism destinations in Victoria
A motor and travel insurance provider has revealed the results of a poll it carried out to find out the most popular tourist attractions in Victoria.
- Health insurance spending to rise in 'ageing population'
Spending in areas such as health insurance and travel insurance could be set to increase as the proportion of the Australian population at retirement age increases, according to a new report.
- We are not AIG, claim IAG
Australia's largest home and car insurer Insurance Australia Group (IAG) has moved to assure shareholders and the media that it is not troubled insurance giant AIG, nor is it related to AIG.
- Insurance premiums could climb as much as 15%: KPMG
There could be a double-digit increase in insurance premiums in the near future, it has been reported.
- Pension contributions 'continue to fall'
Consumers struggling with their mortgage and credit card repayments are forgoing contributing to their superannuation savings, it has been reported.
- Australia to weather the storm, says IMF
Australia's economy is in a healthy enough state to see it make it through the global downturn in one piece.
- Australia to weather the storm, says IMF
Australia's economy is in a healthy enough state to see it make it through the global downturn in one piece.
- Public and government 'confident in face of global economic turmoil'
As the global economy takes a battering, Australians could be forgiven for fearing the worst when it comes to their own nation's money matters.
- Public and government 'confident in face of global economic turmoil'
As the global economy takes a battering, Australians could be forgiven for fearing the worst when it comes to their own nation's money matters.
- PM warns crisis is 'far from over'
Prime minister Kevin Rudd has warned the country that the global financial crisis still has a long way to go before it is over, it has emerged.
