The nation’s big four banks have now all raised their variable mortgage rates, passing on the full 25 basis point increase in the cash rate announced by the Reserve Bank on Tuesday.
It would appear the banks were wary of exceeding the cash rate increase after treasurer Wayne Swan warned against it on Wednesday afternoon.
"I've made it very clear [that] the government expects the banks to behave in the way in which they should behave and the way in which they've traditionally behaved – that is, that they will pass on the official cash rate increase and no more," Mr Swan told reporters in Brisbane.
Australian and New Zealand Banking Group (ANZ) was the first of the big four to hike rates, raising its one and two year terms 25 basis points to 5.70 per cent p.a. and 6.69 per cent p.a. respectively.
The National Australia Bank (NAB) was the next to move, followed by the Commonwealth Bank of Australi (CBA) and finally Westpac at 4:30pm yesterday afternoon.
CBA and NAB retain the lowest variable rate of the big four, at 5.99 per cent, while Westpac and ANZ are higher at 6.06 per cent.
NAB Personal Banking group executive Lisa Gray said the bank’s decision to change interest rates on both variable home loan and deposit products was a reflection of money market conditions and the rise in the official cash rate.
“We take a number of factors into consideration when determining interest rates and the cash rate is one of those. We also consider money market conditions, term funding costs, the cost of raising deposits and the competitive market. Overall, the average cost of funding a home loan continues to rise,” she said.
“Our current variable interest rates remain highly competitive, and even once our new rates come into effect, they still remain at historically low levels.”
Bendigo and Adelaide Bank matched the rate increases of the big four, lifting its variable rate by 25 basis points to 6.15 per cent.