Westpac up, others sure to follow

Westpac has followed the lead of National Australia Bank by increasing its variable rate home loan by more than the Reserve Bank's 0.25 percentage point increase in the official cash rate. The rate on Westpac’s standard variable mortgage is up 0.30 percentage points, matching NAB’s 9.27 per cent. With warnings coming from ANZ chief executive Mike Smith and St George’s chief Paul Fegan that pressures on funding costs show no sign of easing, both banks would have to be considering lifting rates by more than the minimum 25 basis points. Macquarie Group analysis says that rises of 40 basis points would be best for the banks, allowing them to recover some of the increased cost of funds without causing a sharp fall in home loan growth.

Source: Sydney Morning Herald