The big four banks have indicated they will increase mortgage rates beyond the Reserve Bank’s rates in the coming months, The Sunday Telegraph reports.
According to the reports, the big four claim they will be forced to lift interest rates beyond the official RBA cash rate increases because they are facing higher costs of raising money in the wholesale markets.
The Commonwealth Bank, National Australia Bank, Westpac and ANZ last week matched lifts in their lending rates to the Reserve Bank’s 0.25 percent hike to its cash rate, the first increase in 19 months off a 49-year low.
According to a NAB spokesperson, even if the cash rate remained unchanged, it would still be under pressure to increase its mortgage rates.
“The average costs of our funds is rising, and our forecasts suggest it will continue to rise well into 2010. We will need to take all these factors into consideration when setting rates in future.”
Commonwealth Bank CEO Ralph Norris also refused to rule out topping up the RBA increases with hikes of its own.
Going forward we will, as always, look at our overall funding costs to determine our interest rates,” he said.
However the news has angered Treasurer Wayne Swan.
“The government would be quite angry if they (the big four) moved outside the official Reserve Bank rise,” he said.
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