While none of Australia’s lenders moved independently of the Reserve Bank this month, further out of cycle rate hikes are still on the cards.
Speaking to Real Estate Business' sister title, The Adviser, CBA’s general manager mortgage wealth James Sheffield said the costs of funds were rising all the time, which is putting pressure on all lenders.
“We did not just put up our rates to hurt borrowers and make money, rather we out up our rates to stop us from losing money,” he said.
“If we start losing money on home loans, then we become a non-profitable bank and we have seen what happens to non-profitable banks in the United States and Europe.
“It is important to our customers, to our shareholders and to our investors that we remain profitable. While some of our decisions may hurt home owners in the short term, over the longer term, these decisions benefit everyone.”
Mr Sheffield went onto say that the costs of funds are still rising, which is putting further pressure on all of Australia’s lenders.