Bendigo & Adelaide Bank joins growing home loan rate hike club

Bendigo & Adelaide Bank has become the latest small lender to lift mortgage rates as banks feel pressure of rising funding costs.

Attention is turning to when the major banks might move after a string of smaller lender have hiked rates in recent weeks.

Bendigo & Adelaide Bank has followed a string of lenders and hiked its home loan rates out-of-cycle, as funding costs continue to increase and put pressure on margins.

It comes after AMP announced a raise to its variable interest rate yesterday and after Rabobank lifted rates earlier this month.

Wollongong-based IMB, Bank of Queensland, ME and Suncorp all lifted rates last month — despite no sign from the RBA on a move on the cash rate.

Bendigo (BEN) announced it would lift its owner occupier principal and interest loans by 0.10 per cent and owner occupier interest only loans will increase by 0.16 per cent from July 23.

Investment loans and lines of credit will increase by 0.10 per cent per annum.

“Funding costs have been steadily increasing this year, and we’ve absorbed this cost impact to date,” the bank’s managing director Marnie Baker said.

“Today’s adjustment to the variable interest rates will assist in balancing this funding cost increase.

“We carefully balance the interests of our mortgage customers, those who earn money through deposits and those who invest in our Bank.

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We must ensure our pricing remains market competitive, provides the appropriate platform for sustainable growth and supports the hundreds of communities in which we operate.”

The major four banks are broadly expected to raise rates by September this year.