Powered by MOMENTUM MEDIA
the adviser logo
Lender

Banks may lift rates despite RBA decision

by Staff Reporter2 minute read
The Adviser

By: Staff Reporter

While the Reserve Bank decided to leave the official cash rate unchanged when it met yesterday there is once again speculation that funding costs will force the hands of banks to increase their mortgage rates.

Dean Rushton, chief operating officer of Loan Market, said he expected the banks to lift their interest rates soon. External markets and roll-over cheap funding were continuing to put pressure on the cost of funds, he said.

“Even their traditionally cheaper sources of funding such as deposits are now more expensive due to the intense competition for deposits in the Australian market,” he said.

“The precedent has been set and there is a likelihood the banks will have to do this again, most likely after the August 21 election.”

In the past two months, new funding costs have risen, on average, 0.2 to 0.8 percentage points – at the same time the RBA has kept rates on hold.

default
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more