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NAB becomes third of big four banks to raise standard variable home loan rate ANZ joins rivals to raise standard variable home loan rate
(about 4 hours later)
The National Australia Bank has become the third of the big four banks to raise its standard variable home loan interest rate, pushing it up by 0.17 percentage points to 5.6%. ANZ has joined its rivals in raising interest rates for home owners to help cover the costs of boosting their protection against potential economic shocks.
The NAB move follows rate rises by the Commonwealth Bank, who put rates up 0.15 percentage points to 5.6% earlier this week, and Westpac, who increased rates last week by 0.2 percentage points, to 5.68%. The bank will raise its standard variable interest rates for owner-occupiers and investors by 0.18 percentage points to 5.56%.
The bank said it faced significant additional costs due to the new levels of capital required to be held against home loans, and its rate rise would add $36 to monthly repayments on the average loan.
It follows the National Australia Bank’s move to raise its standard variable home loan interest rate, pushing it up by 0.17 percentage points to 5.6%.
Commonwealth Bank put rates up 0.15 percentage points to 5.6% earlier this week, and Westpac increased rates last week by 0.2 percentage points, to 5.68%.
Related: Commonwealth Bank raises standard home loan interest rate by 0.15 pointsRelated: Commonwealth Bank raises standard home loan interest rate by 0.15 points
NAB’s rise, effective from Thursday 12 November, puts pressure on the last remaining major lender ANZ, to take similar action.
Like the other banks, NAB has cited market conditions and requirements to increase capital for the increase.Like the other banks, NAB has cited market conditions and requirements to increase capital for the increase.
All the banks have undertaken billion-dollar capital raisings in the past few months to build capital to absorb possible losses and to secure their business. NAB raised $5.5bn in May.All the banks have undertaken billion-dollar capital raisings in the past few months to build capital to absorb possible losses and to secure their business. NAB raised $5.5bn in May.
“There are a range of factors that come into consideration in interest rate decisions. The home loan market is dynamic, with multiple changes being seen across the industry,” NAB group executive for personal banking Gavin Slater said.“There are a range of factors that come into consideration in interest rate decisions. The home loan market is dynamic, with multiple changes being seen across the industry,” NAB group executive for personal banking Gavin Slater said.
“Today’s decision has not been easy, but we believe this is right decision for the long term.”“Today’s decision has not been easy, but we believe this is right decision for the long term.”
NAB’s move fuels further speculation of a Melbourne Cup day rate cut by the Reserve Bank next month.NAB’s move fuels further speculation of a Melbourne Cup day rate cut by the Reserve Bank next month.
The treasurer, Scott Morrison, said banks were entitled to make their own commercial decisions.The treasurer, Scott Morrison, said banks were entitled to make their own commercial decisions.
“That is entirely a matter for them to explain to their customers about why they’re doing this,” Morrison told reporters in Sydney on Friday.“That is entirely a matter for them to explain to their customers about why they’re doing this,” Morrison told reporters in Sydney on Friday.
“There’s no mandatory requirement on behalf of the government to pass on costs to consumers. At the end of the day, customers can choose where they want to bank and shop and buy their milk.”“There’s no mandatory requirement on behalf of the government to pass on costs to consumers. At the end of the day, customers can choose where they want to bank and shop and buy their milk.”