LEND­ING CLOUDS GATHER

Herald Sun - - NEWS - SO­PHIE ELSWORTH

HOME loan cus­tomers should be pre­pared for higher costs as lenders raise in­ter­est rates in com­ing months.

Lenders in­clud­ing ING, AMP, Bank of Queens­land, Bendigo Bank, Mac­quarie Bank and Pep­per have all an­nounced rate in­creases in re­cent weeks, though the big four banks have been silent. In­dus­try ex­perts say it would be a “pub­lic re­la­tions dis­as­ter” if they upped rates in the mid­dle of the fi­nan­cial ser­vices royal com­mis­sion.

Lat­est data from fi­nan­cial com­par­i­son RateCity found the av­er­age vari­able rate on a $300,000 30-year home loan is 4.28 per cent, with monthly re­pay­ments of $1481. A climb of 25 ba­sis points would cost an ex­tra $44 per month.

In­creases so far have ranged from six to 57 points.

RateCity’s Sally Tin­dall said: “We ex­pect to see the big four hike rates be­fore Septem­ber. The banks’ profit mar­gins are get­ting squeezed and the ques­tion is whether they ask their cus­tomers to stump up the dif­fer­ence or ab­sorb the costs them­selves.”

Lat­est Re­serve Bank fig­ures show most Aus­tralians are well ahead on mort­gage re­pay­ments.

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