The industry is bracing for a rise in mortgage rates following the shock move by the RBA to lift the cash rate by 25 basis points to 4.75 per cent today.
The Commonwealth Bank is the first of the majors to announce its move, lifting its standard variable rate by 45 basis points – 20 basis points more than the RBA.
All of the major banks have warned borrowers to expect higher interest rates in recent weeks, regardless of the RBA’s official changes, as a result of increasing funding pressures.
In fact, almost 80 per cent of brokers surveyed by The Adviser in October expected the banks to move out of cycle with the RBA before year’s end.
According to the straw poll, just 15.8 per cent of the 341 respondents expected the banks to stay in line with the Reserve Bank.