Commonwealth Bank to lift rates
The sub-prime mortgage fiasco in the United States has finally hit everyday Australian's with the Commonwealth Bank of Australia announcing they will lift the variable home loan interest rate outside of any rate increase announced by the Reserve Bank.
Commonwealth Bank head of retail banking Ross McEwan said, "It raises some of the margin back but nowhere near what we lead,"
Also giving his opinion on the rising costs faced by the bank was Commonwealth Bank head of retail products Michael Cant who said, "Obviously our funding costs, like everyone else in the market, have increased significantly,''
Having posted another record profit of $4.6 billion for the 12 months to the end of June its obvious that bank needs to increase the interest rates so it can function effectively and profitably.
You can expect the announcement to open the floodgates with the other major lenders all lifting their rates sooner rather than later.
The National Australia Bank, who ironically also posted a record profit of $4.6 billion was the first to suggest another rise in interest rates, their spokesman also mentioned the rising costs of funding loans would need to be pulled back with a rate rise.
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