Variable mortgage rates increased by CBA
It has been reported that the CBA has become the first of Australia’s major banks to increase variable mortgage interest rates since the base rate cuts started last September.
Last September the Reserve Bank of Australia started a round of interest rate cuts to increase affordability amongst homeowners and try and boost the economy. However, one of the nation’s four largest lenders has now announced that it is putting up its variable mortgage interest rates from the start of next week.
It is reported that the Commonwealth Bank of Australia will become the first of the country’s four leading lenders to increase the interest rates charged on its variable rate mortgages since the base rate cuts started last September. From June 15th the standard variable rate with CBA will go up to 5.74 percent from its current rate of 5.64 percent.
There are now concerns that other major lenders will follow suit and also increase their standard variable mortgage interest rates, which could hit both residential and commercial mortgage holders hard in terms of finances. One industry official said: “This will be of peak concern for the Reserve Bank. We think they will probably ease policy again to prevent other banks hiking their variable rates.â€
The Australian Treasurer, Wayne Swan, described the CBA rate hike as ’selfish’. He said: “The decision from the Commonwealth Bank gets in the way of rate relief needed to stimulate our economy and to support jobs. I think Australians rightly will be furious with the Commonwealth Bank for hindering the efforts of the Commonwealth Government, the Reserve Bank and the community to support our economy during this global recession.â€
Source - www.bloomberg.com/apps/news?pid=20601081&sid=a_tubeySN7so