Westpac announces that it will raise its variable home loan rates by 14 bps
The change will take into effect on 19 September, with the bank citing an increase in wholesale funding costs as the main reason. If you're an Australian, this probably isn't anything new. The smaller houses have already started to do this since May but talks of the "Big Four" starting to do so was to possibly begin in September and it looks like it's finally coming.
Do note that the increases here are coming despite the RBA still seen nowhere near hiking rates through 2019 still.
Lenders have been groaning about short-term funding costs rising in Australia since the start of the year. Here's a look at the BBSW rates:
The initial reaction was that the rise in funding costs would be temporary but so far they haven't come down by much since peaking in June. Hence, as banks weigh up maintaining their net margins, the only way to keep up with pleasing shareholders is to pass the cost on to consumers.
The thing about one bank starting to do so, is that the rest will follow suit. With Australian household debt already posing problems for the economy and the RBA, this will only help to amplify the pain felt there.
