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."

6 comments:

WT said...

Arseholes.

Chris said...

I really wish I could switch my home loan to an overseas bank on a more reasonable interest rate. :(

Jon said...

I don't work for a bank, and I have a home loan, and if they want to put their prices up, then they can. That's how the capitalist system works. If you don't like their prices, go somewhere else. My local credit union (who I have my loan with) has variable rate loans for 9.1%, and 1 year fixed for 8.3%. They can do it cheaper because they are funded from deposits (I asked them).
Also, while those of us with loans are paying more, the rest who don't have a loan and have money to lend to banks and credit unions are laughing. Not sure when the last time that 3 month term deposits were offering over 8%.

2 tanners said...

Chris,

You can do that, but you don't want to. In the early 1980's people were taking out very low interest Swiss franc denominated loans. When the dollar collapsed, the value of the loans and the repayments went sky high. Much pain was caused. You really don't want to take on long term exchange rate risk when the dollar is at a long-time high.

Francis Xavier Holden said...

2 Tanners - but those farmers who speculated with cheap overseas Swiss loans won both ways - cheap rates and then bailed out by the government when the thing logically went the other way.

Tip: Always be a farmer with debt - Take risky decisions with money - if you chance on a win then all governments will give you tax breaks and then when your risky decision tanks you will get subsidies, be bailed out and as a bonus have a sympathetic Australian Story about your "lifestyle" on ABC TV.

Lestat™ said...

Tax will always be passed on to the consumers. A typical scenario in finance broker brisbane where most people are in constant chase to lowest interest rates where in fact they were not the best mortgage rate.

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