Customers hit by more home loan rate increases

CUSTOMERS will have to find hundreds of dollars extra a year after two more of the nation’s largest banks hiked interest rates. But borrowers are being urged to challenge the rises.

MORTGAGE customers will have to find hundreds of dollars extra a year after two more of the nation’s largest banks hiked interest rates.

Within minutes of each other on Thursday, ANZ and the Commonwealth Bank announced their rates would increase on all their variable owner-occupier and investment loans.

This leaves National Australia Bank as the only remaining Big-Four bank to lift rates.

ANZ’s increase of 0.16 percentage points will hit customers with a $300,000 30-year loan by $30 extra a month, data from financial comparison website RateCity shows. CBA’s hike of 0.15 percentage points will sting customers an extra $28 a month.

Westpac’s standard variable rate – the benchmark interest rate – is the highest of the Big Four at 5.38 per cent, followed by CBA at 5.37 per cent, ANZ at 5.36 per cent and NAB at 5.24 per cent.

Borrowers are being urged to challenge the rate rises.

But 1300homeloan director John Kolenda said borrowers should not accept the rises.

“The No. 1 thing I would be doing is reviewing my home loan and seeing what is available on the market,” he said.

“An owner-occupier should be aiming for a rate in the 3.6 per cent range and, if not, go back to your bank and see if you can get something better.”

Westpac last week hiked variable rates by 0.14 percentage points. ANZ will not pass on the hike to drought-affected mortgage customers.

Both banks blamed the rises on wholesale funding costs.

ANZ’s hike will begin on September 27 while CBA’s will kick in on October 4.

Latest calculations from Deutsche Bank have revealed the latest rise will lift Westpac’s bottom line by $244 million, CBA’s by $307 million and ANZ by $178 million. The Reserve Bank of Australia board this week kept the cash rate on hold at 1.5 per cent.