The Commonwealth Bank has joined two other majors and lifted its home loan interest rate.
As of October 4 all the CBA’s variable home loan rates will increase by 15 basis points, making the standard variable home loan rate for owner occupiers 5.37 per cent per annum who are paying principal and interest.
For investors paying principal and interest, their rate will jump to 5.95 per cent.
Commonwealth Bank spokesman Angus Sullivan explained the hike in Broker News.
“We have made this decision after careful consideration,” he said.
“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.”
The Commonwealth Bank has finally lifted its rates after a prolonged increased in funding 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,” Mr Sullivan said.
“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.”
“As a result of this, we have made the decision to raise our variable home loan rates to partially offset the increased costs.”
Mr Sullivan added that to allow homeowners the chance to assess their options the rate hike won’t come into effect for four weeks.