Which bank lets the others take the lead?

IF you're after the highest variable home loan rate in the land, then it's time to step into a Commonwealth Bank branch, which is slapping borrowers hard.

IF you're after the highest variable home loan rate in the land, then it's time to step into a Commonwealth Bank branch, which is slapping borrowers hard.

Of the big five banks, Commonwealth Bank and St George lead on mortgage rates.

The nation's home lenders have boosted their mortgage rates in recent times independent of Reserve Bank rate rises – but unlike recent years when they all charged the same rates, costs charged have now diverged.

St George Bank this week raised its standard variable rate at 9.47 per cent and the increase makes St George the most expensive home lender of the big five banks.

The Commonwealth Bank made late yesterday announced a lift in standard variable rate by 12 basis points to 9.44 per cent - which makes it the most expensive of the Big Four.

ANZ and Westpac come next with rates of 9.37 per cent for standard variable home loans compared to 9.36 per cent for NAB. 

Costs rise, but so do profits

All the big banks have punished borrowers with rate rises over and above rises in the official cash rate this year – citing higher wholesale funding costs as the main reason.

At the same time, the banks are pulling in record profits – in part by keeping interest rates on savings accounts close to 0 per cent. Savings rates have largely not been raised in line with rises in the official cash rate.

In February's reporting season, the Commonwealth Bank recorded a cash net half-year profit record of $2.39 billion, up 4 per cent from a year earlier.

ANZ’s full-year profit to September last year was a bumper $4.18 billion, up more than 13 per cent on the previous year.

The nation’s fifth-largest bank St George reported a record full-year profit result to September 2007 of $1.16 billion, an increase of 13 per cent.

Westpac joined in on the double-digit profit growth, announcing a record net profit of $3.45 billion over the year to September 30, up 12 per cent.

NAB recorded a more modest 4.2 per cent increase, to a record $4.6 billion for the year to September 30.

One readers told NEWS.com.au about the financial difficulties he was facing:

"With the increase of rates over the last few years we have gone from saving $500-$700 per month to being behind by at least $200 per month.

"This is not to mention the cost of food, fuel and child care and such. I know my wage hasn’t gone up 7 times(in two years, like official interest rates) … and we certainly don't make billions profit each year like the banks. Like the captain of the Titanic said, where is all this water coming from? Are we sinking? Yes, very quickly."