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Major Banks Increase Rates

On Friday, 10 February 2012, ANZ announced increase of its interest rates on standard variable home loans and business loans by 6 basis points, that is by 0.06%.

ANZ is currently offering 7.36% on variable interest home loans.

While ANZ increased its standard variable home loan rates, the bank also announced a reduction of its fixed rates.

Borrowers find the ANZ fixed rate loans competitive when compared with other lenders.

Did the other banks increase their interest rates?

As we predicted on Friday, other banks followed ANZ‘s decision to increase their variable interest rates on home loans.

The increase in interest rates by the major banks now places pressure on the RBA to reduce its interest rates.

The Commonwealth Bank of Australia and National Australia Bank announced adjustments to their interest rates yesterday afternoon.

What are the new interest rates at the major four banks?

After ANZ announced the 6 basis points increase of its standard variable rates, Commonwealth Bank of Australia announced its 10 basis point (0.10%) increase while National Australian Bank increased its rates by 0.09%.

The major lenders are offering variable interest rates as follows:

  • CBA 0.10% increase to 7.41%
  • ANZ 0.06% increase to 7.36%
  • WBC 0.10% increase to 7.46%
  • NAB 0.09% increase to 7.31%

You can view the best special offers from our banks on our interest rates page.

Will other lenders increase their interest rates?

While there are no announcements yet by non-bank lenders or smaller banks, they are expected to follow the majors.

Smaller lenders may also use this opportunity in the short term to promote their company with lower interest rates.

After capturing some more market share the smaller lenders may also put up their rates. This is known as loss leading.

Why are the major banks increasing their interest rates?

The major banks have been operating on very low margins due to competition with each other. The cost of doing business as well as funding pressures on the banks are very real.

Whilst the low rates offered by the banks provided a great opportunity for the borrowers to save money on their loans, it was unsustainable for the banks.

As such, a rate rise by the major lenders was expected, despite being independent of RBA.

Will the banks be increasing their interest rates again?

We expect that within 12 months the banks will need to increase their interest rates again. This is because the cheap long term funding that was arranged before the GFC, is rolled over at higher rates.

Because of this, interest rates will remain and may continue to rise, in the foreseeable future.

How can I save on my home loan?

If you are concerned about the increase in variable interest rates and want more financial stability, it may be time to apply for a fixed rate home loan.

By getting a fixed rate home loan, you will have peace of mind, that any further increase in interest rates will not affect you.

Contact us today on 1300 889 743 or enquire online to find out how much we can save you on a fixed rate home loan.