All four banks cited APRA’s requirement for the big four banks to hold more capital to make them more shock-proof.
The major banks hold around 85 per cent of all home loans in the Australian market. What this means is that from November, the majority of Australians will be paying between $300 and $400 a year more for their variable home loan.
RateCity’s Money Editor Sally Tindall said the move goes against an increasing tide of rate cuts from some of the smaller lenders.
“These rate increases come at a time of record lows, with most experts expecting a rate cut well before any official rise in the cash rate,” she said
“The last time any of the big four banks raised interest rates across the board like this was back in April 2012.
“What’s different between 2012 and today is that it’s now far easier to switch.
“Anyone that feels unfairly done by should shop around as there are more than 10 lenders with rates under 4 per cent and switching to one of those 4% deals could save you almost $2000 in the first year.
“The only thing holding the RBA back from a rate cut is the hot housing market. Now that all big four banks have lifted home loan rates, the RBA Governor has more than enough room to move,” she said.
ANZ CEO Australia Mark Whelan said: “This decision reflects the significant additional cost of
capital banks are now required to hold against home lending.
“Despite these additional costs, we are committed to working hard to keep lending rates as low as possible for customers,” Mr Whelan said.
NAB‘s executive in charge of personal banking, Gavin Slater, told the SMH that a range of factors were considered in the decision to hike rates.
“Today’s decision has not been easy, but we believe this is right decision for the long term. We know we have to balance the interests of our customers with the needs of our more than 550,000 shareholders.
“There are a range of factors that come into consideration in interest rate decisions. The home loan market is dynamic, with multiple changes being seen across the industry. Regulatory changes on capital requirements also increase the costs associated with providing home loans,” he said.
BIG FOUR RATE HIKES AND REPAYMENT INCREASES
Based on a $300,000 loan over 30 years for owner-occupiers:
CBA basic variable
CBA standard variable
NAB basic variable
NAB standard variable
ANZ basic variable
ANZ standard variable