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Date Published : Monday, May 12, 2008
The home loans offered at one of Australia's most prestigious banks have gone from being among the cheapest on the market to the most expensive within the last year, a new study has revealed.
Interest rates being charged on Macquarie Bank mortgages are now at over ten per cent - much more than the Reserve Bank's official base rate of 7.25 per cent - less than 12 months after rivalling the lowest rates around.
The Sydney-based bank has increased the interest rates charged on its flagship Macquarie Saver Express home loans by 1.6 per cent so far in 2008 to 10.28 per cent. Last week, the latest increase of 0.4 per cent took effect, the Herald Sun reports.
Meanwhile, the repricing of no-documentation loans has been even more aggressive with some borrowers now required to pay more than 11 per cent on their mortgages.
The bank's spokesman Daniel Fitzpatrick told the publication that rates have been pushed higher than expected due to the global credit crunch, current uncertainty in the financial markets and high interest rates set by the Reserve Bank.
"We are absorbing some of this cost and passing some onto our clients," he said.
"Unlike the major banks Macquarie Mortgages's business model has been predominantly funded by wholesale markets and not by bank deposits. As a consequence we are experiencing a higher cost of funding."
Last week, Macquarie was reported by the Australian to be eying up a deal to buy an airport in the US state of Texas.
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