LENDING CLOUDS GATHER
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.