ANZ and CommBank have followed Westpac by raising mortgage rates, with NAB the only big four bank yet to hike variable rates.
ANZ hiked its variable home loan rates by 0.16 per cent it announced on Thursday, blaming rising international borrowing costs.
The bank said it will not increase mortgage rates for its customers in drought-declared parts of regional Australia – a move that will protect about 70,000 borrowers from the increase.
ANZ’s higher rates will take effect from September 27, the bank said, and will take its residential principal-and-interest rate to 5.36 per cent.
CommBank followed shortly after, announcing that it will increase variable home loan rates for owner occupied and property investment loans by 15 basis points, or 0.15 per cent on October 4.
Following a sustained increase in funding costs @CommBank will increase variable home loan rates for owner occupied & property investment loans by 15 basis points or 0.15% per annum effective 4 October. https://t.co/WQCrtrFUKz pic.twitter.com/Ntfc1M7G2e
— CBA Newsroom (@CBAnewsroom) September 6, 2018
“We recognise that this will have an impact on customers,” CBA CEO Matt Comyn said.
Mr Comyn attributed the hike to an increase in funding costs over the past six months, which he said remained elevated by “about 25 basis points”.
“We’ve continued to absorb those costs over that six month period. But we also think it’s important to price or products, including our home loan products at a way that reflects underlying costs,” he said.
The hikes follow Westpac’s decision to lift rates a similar amount for standard variable home loans.
ANZ group executive Fred Ohlsson told the Financial Review the decision to lift rates would not apply to customers affected by drought.
“This was a difficult decision given we know the impact rising interest rates have on family budgets,” he told the newspaper. “The reality is it is more expensive for us to fund our home loans on wholesale markets.”
Mr Ohlsson also said the bank needed to balance the competing interests of stakeholders “including our various customer groups, communities we operate in and our shareholders”.
The move to lift rates follows a PR nightmare for the big banks at the Banking Royal Commission, with Treasurer Josh Frydenberg saying last week Westpac would need to explain its decision.