08/10/2009 - 12:00

Big four banks lift rates by 25bps

08/10/2009 - 12:00

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Australia's big four banks have today matched the central bank with an increase of their standard variable mortgage interest rate by 25 basis points.

Australia's big four banks have today matched the central bank with an increase of their standard variable mortgage interest rate by 25 basis points.

ANZ's standard variable home loan rate will rise to 6.06 per cent from October 12, from 5.81 per cent, the Melbourne-based bank said in a statement.

NAB's standard variable home loan rate will rise to 5.99 per cent as of Monday October 12, from 5.74 per cent, Melbourne-based NAB said in a statement.

Meanwhile CBA's standard variable home loan rate will rise to 5.99 per cent as of Tuesday Ocober 13, from 5.74 per cent, Sydney-headquartered CBA said in a statement.

And Westpac's standard variable home loan rate will rise to 6.06 per cent on Monday October 12, from 5.81 per cent, the Sydney-based bank said.

The Reserve Bank of Australia increased the overnight cash rate by 25 basis points to 3.25 per cent on Tuesday - marking its first monetary policy tightening since March 2008.

Westpac followed ANZ, NAB and CBA in matching the RBA rate rise, all of which announced rate increases earlier on Thursday.

Westpac said credit card and variable business loan interest rates would also rise by 25 basis points on Monday.

"The RBA's decision is a clear signal of its confidence in the recovery of the Australian economy," Westpac retail and business banking executive Peter Hanlon said in the statement.

Westpac will also increase interest rates on personal and business deposit accounts by 25 basis points.

"Personal and business online deposit accounts will benefit from a full 0.25 percentage point increase with Westpac's deposit rates now at their highest levels above the official RBA cash rate in recent memory, reflecting the intense competition among Australia's major banks for household savings," Mr Hanlon said.

NAB also said it was raising its deposit product interest rates by 25 basis points, with the iSaver account increasing to three per cent and the iSaver introductory rate rising to 4.65 per cent, also effective from Monday.

NAB will also increase a range of its variable business lending and deposit rates by 25 basis points.

"We take a number of factors into consideration when determining interest rates and the cash rate is one of those," NAB group executive personal banking Lisa Gray said in the statement.

"We also consider money market conditions, term funding costs, the cost of raising deposits and the competitive market.

"Overall, the average cost of funding a home loan continues to rise."

NAB said that nine out of 10 of its home loan customers were on a discounted package and that the majority were ahead in their repayments.

The bank said home loan rates were still significantly lower than a year ago, when the major banks' standard variable rates ranged between 9.33 per cent and 9.37 per cent.

Shares in NAB jumped $1.24, or 4.13 per cent, to $31.26 by AEDT 1535.

Shares in CBA climbed $1.67, or 3.26 per cent, to $52.97 by AEDT 1538.

Shares in Westpac gained 79 cents, or 3.1 per cent, to close at $26.30.

And shares in ANZ closed at $24.74, a gain of 89 cents or 3.73 per cent.

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