Banks will stick to RBA rate rises: Norris

by BN01 Oct 2009

The CEO of the Commonwealth Bank, Ralph Norris, has indicated that the banks will not make a grab for extra margin as official rates begin to rise, The Daily Telegraph reported today.

When asked if borrowers could expect rate hikes higher than RBA increases, Norris said: "I would be surprised if that was the case."

The major banks, which had been in lockstep with each other on interest rates for a number of years, started moving independently about two years ago. CBA's margin over the official rate has grown by about 1% in two years, including hikes outside the official schedule and failing to pass on cuts.

At 5.74%, CBA and NAB have the lower variable home loan rate of the big four banks with ANZ and Westpac on 5.81%. Heritage Building Society is offering 5.45% while Credit Union Australia's standard variable rate is currently set at 5.52%.

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CBA tips mortgage rates to rise - CBA's competitive pricing on mortgages helped it gain 21.9% of the mortgage market in 2009, but chief executive Ralph Norris has warned interest rates could rise.