More second tiers ratchet up rates

by Adam Smith16 Feb 2012

More second tiers have moved on rates as ING Direct and Westpac's regional subsidiaries followed recent hikes.

ING Direct has raised variable rates by 10bps. The move takes the rate on its Mortgage Simplifier product to 6.72%. The bank echoed its peers in blaming "increased funding pressures in wholesale markets" for the increase.

Westpac's regional subsidiaries have also followed suit. St. George and BankSA raised rates by 12bps, bringing their rate to 7.42%. In spite of the hike, St. George CEO Rob Chapman argued that most of the bank's customers would pay less than the standard variable rate, with discounts up to 70bps available.

Newly-badged Bank of Melbourne moved by less than its regional siblings, raising rates 10bps. The bank's chief executive, Scott Tanner, said its price match promotion would continue. The bank has vowed to match the advertised price of the majors across fixed and standard variable home loans.

With Bank of Melbourne not moving in line with St. George and BankSA, a St. George product management spokesperson has told Australian BrokerNews the banks make pricing decisions independently of one another.

"There are factors other than the cost of funding that come into play, such as competitive environment and customer base," the spokesperson said.

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