Friday, July 11, 2008

It's on. The big banks break through 9.5 per cent

"The Commonwealth Bank today announced that as a result of the continued increasing cost of funds that it is experiencing that it was increasing its variable home loan interest rates by 0.14% pa. This means that the Bank’s standard variable rate home loan will increase from 9.44% pa to 9.58% pa..."

You get the idea.

Right now the ANZ and Westpac are charging 9.47%, the NAB is charging 9.46, and St George boosted its rate 20 points to 9.67% last week.

The banks are widening their margins while they can in case the next move in interest rates is down.

UPDATE: Late Friday the ANZ Bank has followed the Commonwealth, up to 9.62%.

Steve Roberts of Lehman Brothers Australia is quoted as saying:

"They are putting up mortgage rates at a time when the housing
finance data just seems to be collapsing."

"This is a bizarre way to put some assets on your books."