Just days after Westpac announced that it was raising rates out of cycle, both ANZ and CBA have announced similar hikes.
Effective 27 September, ANZ will increase interest rates on its variable owner-occupied and investment home loans by 16 basis points.
Commonwealth Bank (CBA) is also set to lift rates on all of its variable rate home loan products by 15 basis points, effective 4 October.
CBA noted that for owner-occupiers, the standard variable home loan rate will increase to 5.37 per cent per annum for customers with principal and interest repayments, and 5.92 per cent per annum for customers with interest-only repayments. For investors, CBA stated that the standard variable home loan rate will increase to 5.95 per cent per annum for customers with principal and interest repayments, and 6.39 per cent per annum for customers with interest-only repayments.
Both banks have cited a “sustained rise in wholesale funding costs”, with ANZ adding that its decision followed a “consideration of business performance and market conditions”.
Following CBA’s announcement, Angus Sullivan, group executive, retail banking services, said: “We have made this decision after careful consideration. We are very conscious of the impact that increasing interest rates will have on our customers; however, it is important that we price our home loan products in a way that reflects underlying costs.
“Over the past six months, we have seen funding costs increase significantly, driven primarily by a rise in the 90-day bank bill swap rate. These changes have increased the cost of providing loans to our customers.
“We have absorbed these higher funding costs over the past six months in the hope that they would ease. Unfortunately, the costs have remained high and it is now expected that they will remain elevated for the foreseeable future.”
Mr Sullivan added: “As a result of this, we have made the decision to raise our variable home loan rates to partially offset the increased costs. We understand this will have an impact on household budgets. To allow our customers time to prepare, this change will not take effect for four weeks, giving home owners an opportunity to look at their options.”
Meanwhile, ANZ’s group executive, Australia, Fred Ohlsson, said: “This was a difficult decision given we know the impact rising interest rates have on family budgets. The reality is it is more expensive for us to fund our home loans on wholesale markets and we also needed to balance the needs of all stakeholders.
“There is no change to the effective rates of our home loan customers in drought-declared regional Australia, benefitting more than 70,000 of our customers.
“We wanted to play our part in keeping cash in regional towns impacted by the drought and we hope this will also assist both families and small businesses in these areas.”
NAB is the only big four bank that is yet to announce out-of-cycle rate increases.
[Related: Westpac hikes home loan rates]