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A mortgage industry veteran has warned borrowers to brace for interest rate rises from the major banks despite the prospect of another cash rate cut this year by the Reserve Bank.
John Kolenda, managing director of 1300HomeLoan, said that with the long-running federal election now out of the way, the stage was set for the banks to take their own course and increase home loan rates.
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“Major lenders have been assessing options to reprice, but have delayed making any moves due to the attention put on them by both political parties and awaiting the outcome of the federal election,” he said.
“The banks need to lift rates in response to rising funding costs, and the additional costs they face for the extra compliance and regulatory increase on reserves they had to have in place by the end of June this year.
“Banks will be eyeing repricing opportunities and look to lift rates out of cycle sometime in the second half of this year now the election is out of the way.”
Mr Kolenda said despite a competitive lending environment and recent discounting by some banks, the conditions for rate hikes remain.
[Related: NAB announces raft of rate changes]
