ZCZC
BCN-14
AUSTRALIA-BANK-INTEREST-HOME-LOAN
Aussie banks lift interest rates on home loans
SYDNEY, Sept. 8, 2018 (BSS/Xinhua) – Australia’s biggest three banks have
raised interest rates on home loans, with Westpac Bank the first to make the
move last week and Commonwealth Bank (CBA) and Australia and New Zealand Bank
(ANZ) following suit on Thursday.
Head of Australian macroeconomics at BIS Oxford Economics, Sarah Hunter,
told Xinhua on Friday that the move does not come as a surprise and that the
remaining of Australia’s big four banks (NAB) is likely to also raise their
mortgage rates.
“It’s not surprising, given that Westpac did it last week, we flagged it
as very likely that the other of the big four banks would respond in a
similar way,” Hunter said.
In terms of the broader impact on the economy and Australian families,
Hunter said that some mortgage holders may very well feel a pinch.
“It does mean that people are going to have to pay a little bit more each
month in their mortgage and that will necessarily reduce their disposable
income,” Hunter said.
The increase, however, is relatively small compared to for instance a rate
hike by the the country’s central bank, the Reserve Bank of Australia, which
Hunter believes remains an unlikely prospect.
The banks are attributing their actions to increased international
borrowing costs which they say they have been absorbing for the past six
months but can no longer do.
“Over the past six months, we have seen funding costs increase
significantly, these changes have increased the cost of providing loans to
our customers,” CBA’s group executive for retail banking Angus Sullivan said
in a statement.
“We are very conscious of the impact that increasing interest rates will
have on our customers, however it is important that we price our home loan
products in a way that reflects underlying costs.”
BSS/XINHUA/HR/1122