Non-major hikes rates by up to 25bps

Suncorp announced that the changes, which will become effective on 28 March, will see variable owner-occupier principal and interest rates increase by 0.05 per cent, variable investor principal and interest rates increase by 0.08 per cent and variable interest-only rates increase by 0.12 per cent.

Suncorp’s variable small business rates will increase by 15 basis points and Access Equity (line of credit) rates will increase by 25 basis points.

Suncorp banking and wealth CEO David Carter said that the decision to increase rates was based on increasing costs of funding as well as meeting the costs associated with regulatory change.

“Funding costs have been steadily rising since the end of October. This has been driven by the outlook for US interest rates as well as domestic factors,” Mr Carter said.

“As a result, we have seen the key base cost of funding, being the three-month bank bill swap rate (BBSW), rise [by] approximately 0.20 per cent. This increase results in higher interest costs to our wholesale funding as well as our retail funding portfolio, such as term deposits.

“Additionally, APRA released its consultation paper on capital levels for banks in February, which will require all banks to hold additional capital for all investment and interest-only loans.”

However, the higher interest costs will benefit Suncorp’s deposit customers, with the lender offering a 2.6 per cent bonus interest rate in its Growth Saver product.