Australia’s Macquarie lifts home loan rate
SYDNEY Australias biggest investment bank Macquarie Group hiked home loan rates even as the countrys official rate remains steady, in a sign funding costs were rising and larger rivals such as the big four retail banks could follow suit.
Rate hikes by top lenders would pressure the housing market that is already in retreat following a series of tighter regulations, and anger consumers and others amid a public inquiry into finance sector misconduct in Australia.
Macquarie said yesterday on its website that it was raising mortgage rates by 6-10 basis points, but did not provide an explanation for the move, which comes a week after the Reserve bank of Australia kept rates on hold at its monthly meeting. Rates have been at a record low since August 2016.
Were going to see the higher funding costs get eventually passed through by the major retail banks, which will further squeeze households in terms of their outlook for consumption, said Kerry Craig, Global Market Strategist, J.P. Morgan Asset Management. Do we see out-ofcycle rate hikes coming through from other banks in Australia? Yes, probably.
Smaller players had already been raising their home loan rates in recent weeks to protect their margins.
Australia-listed Homeloans Ltd increased rates by up to 14 basis points for investment housing loans as a result of increased funding costs, according to a spokeswoman.
Dutch lender ING Groep NV increased its variable residential home loan rate by 10 basis points in recent weeks to adjust to market changes, a spokeswoman said via email.
Banking analysts at Citigroup estimate higher funding costs will push Australias four largest lenders, which dominate about 80 per cent of the A$1.6 trillion (US$1.19 trillion) mortgage market, to raise rates by September. REUTERS