CBA, National Australia Bank and Westpac have announced they will raise mortgage interest rates, despite the Reserve Bank being widely expected to leave the cash rate on hold later today.
The bank mortgage rate hikes come amid uncertainty on global debt markets after the US election, which is increasing international funding costs.
NAB revealed yesterday it will increase its variable rates on new and existing residential investor home loans by 0.15% per annum. The change will be effective from Monday 12 December 2016.
There will be no change to NAB's variable rate for owner occupiers, which is currently 5.25%.
NAB's chief operating officer, Antony Cahill, said the change reflects the "increasingly challenging environment". He said net interest margins are down in its home lending business.
“A low-rate environment poses considerable challenges to all lenders, and we must respond to what is happening in the economy and the market. In doing so, we have to consider a range of factors including the ongoing need to hold longer-term stable sources of funding, continued elevated funding costs, regulatory requirements, and the competitive pressures at play," said Cahill.
Westpac was the first of the big four to begin lifting rates, raising “interest-only” rates for investors and owner-occupiers by eight basis points. The bank said “prudent lending practices” are behind the move. CBA quickly followed suit, raising rates on its fixed-rate mortgages.
NAB’s online subsidiary UBank has also lifted variable rates by 10 basis points, and ME has raised rates for new customers by up to 15 basis points.
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