Banks pass costs to business customers

While the big banks have so far resisted pressure to increase their variable home loan rates, businesses are bearing much of the brunt of increased funding costs. Over the last few weeks both ANZ and Westpac have increased their variable rate business loans by between 0.15 and 0.25 per cent and the Commonwealth followed suit last week, increasing its rate by 0.15 per cent. While the major banks have repeatedly warned that they will have to increase their variable mortgage rates before Christmas, so far it has been other products such as personal loans and credit cards that have been used to recover some of the higher funding costs.