Why are the big banks raising home loan rates?
Commonwealth Bank has announced a 0.15 percentage rate rise for variable home loans. Westpac has announced a 0.20 percentage point rate rise. The other two big banks, ANZ and National Australia Bank are expected to also announce rate rises.
The big four banks are subject to new capital requirements because they have been deemed ‘too big to fail.’ That means they have to retain more capital for each loan they issue. Smaller lenders are not subject to these new rules and are expected to become more competitive.