Biggest Lender Leads The Charge
The Age
Tuesday March 11, 2008
THE nation's biggest mortgage lender, the Commonwealth Bank, has increased its lending rate by 35 basis points, the biggest so far of all the major banks.
The ANZ is expected to announce a similar rise, and St George Bank could go even higher, signalling that it is considering a 40-basis-point rise.Commonwealth mortgage holders face a standard variable rate of 9.32% from tomorrow.Federal Treasurer Wayne Swan warned that banks ran the risk of losing customers. "We fully understand the impact of rate rises on Australian families and have acted decisively with our bank-switching package to help customers vote with their feet if they think their bank is acting unreasonably," he said.Last week Westpac hit customers with a 30-basis-point rise, taking in its standard variable mortgage rate to 9.27% The . National Australia Bank announced a rise of 29 basis points. The Commonwealth's new rate is 10 points above the Reserve Bank's official cash rate. Last Tuesday the central bank raised rates by 25 points to a 12-year high of 7.25%.The Commonwealth's head of retail banking, Ross McEwan, said the increase had maintained "a balance between the needs of shareholders and customers" with the bank continuing to absorb "a significant portion" of the additional costs incurred since the global credit crunch.While the Commonwealth is keen to raise its lending rate by 35 basis points, it would not give the same deal to customers with deposit accounts. The deposit interest rate on the NetBank Saver and Business Online Saver accounts will rise by the same level as the official cash rate, 25 basis points.Meanwhile, Liberal frontbencher Joe Hockey has played down speculation on his future, and warned that Australia is heading towards recession.The Liberal Party is reportedly considering drafting him into a NSW state seat, but ABC online quoted Mr Hockey as saying: "I'm not that focused on myself as I am on others at the moment. I firmly believe that we are heading into recession nationally."BUSINESSDAY? Another turn of rates screw PAGE 1
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