Banks do have extra costs says RBA

The Reserve Bank of Australia says banks have not been unreasonably raising interest rates on mortgage borrowers. The RBA Bulletin for April, released yesterday, concludes that the major banks “have cut variable housing loan rates more than the fall in their cost of funds.”

The central bank confirms that the banks are correct with their statements that they have been facing increased funding costs. “The recent financial market turbulence has increased banks' funding costs relative to the cash rate” said the RBA.

Last week the prime minister and the treasurer criticised Commonwealth Bank for raising interest rates on its standard variable mortgage by 0.10 per cent to 5.74 per cet.

Source: Herald Sun