Just minutes after ANZ announced its home loan interest rate hike, another major has done the same.
Commonwealth Bank of Australia has today announced it will increase its variable home loan rates, following a sustained increase in funding costs.
All variable home loan rates will increase by 15 basis points from 4 October 2018.
For owner occupiers, the standard variable home loan rate will increase to 5.37% per annum for customers with principal and interest repayments, and 5.92% per annum for customers with interest only repayments
For investors, the standard variable home loan rate will increase to 5.95% per annum for customers with principal and interest repayments, and 6.39% per annum for customers with interest only repayments
Angus Sullivan, group executive retail banking services Commonwealth Bank, said, “We have made this decision after careful consideration. We are very conscious of the impact that increasing interest rates will have on our customers, however it is important that we price our home loan products in a way that reflects underlying costs.
“Over the past six months, we have seen funding costs increase significantly, driven primarily by a rise in the 90 day Bank Bill Swap Rate. These changes have increased the cost of providing loans to our customers.
“We have absorbed these higher funding costs over the past six months in the hope that they would ease. Unfortunately, the costs have remained high and it is now expected that they will remain elevated for the foreseeable future.
“As a result of this, we have made the decision to raise our variable home loan rates to partially offset the increased costs. We understand this will have an impact on household budgets. To allow our customers time to prepare, this change will not take effect for four weeks, giving homeowners an opportunity to look at their options.
“For customers looking for more certainty around their mortgage repayments, we continue to offer a range of fixed rate options that may be suitable. These include a 3.79% per annum two year fixed rate for owner occupier customers, with principal and interest repayments, on our wealth package.
“We also encourage customers with interest only repayments to consider whether a lower rate principal and interest home loan would better meet their needs. Customers can switch online, in-branch or over the phone at no cost.
“Our customers can speak with one of our home lending specialists, who can review their home loan options free of charge, to ensure that their arrangements remain appropriate for their circumstances.”