(12 November 2010 – Australia) Westpac Banking Corporation has joined its big four peers, becoming the last of the major rivals to raise rates.The bank has raised its standard variable interest rate on home loans by 35 basis points to 7.86 percent.
Westpac says it will lift the SVR from Tuesday. Interest rates on deposits would increase by at least 25 basis points, the bank said today.
The move came after rival National Australia Bank raised its SVR by 43 basis points to 7.67 percent earlier today and said it would abolish exit fees on home loans.
Westpac did not announce any abolition of its A$700 exit fee, but said it would discount its three-year fixed home loan rate by 40 basis points to 7.09 percent.
Westpac said its decision to lift its SVR means repayments on the average A$250,000 home loan will rise by about A$56 per month.
Rob Coombe, head of retail and business banking, attributed the move to the bank’s rising average cost of funding which squeezed its net interest margin by 19 basis points in 2009/10.
‘In this context, our interest rate decision has not been taken lightly,” he said in a statement.
‘We have carefully balanced the varied interests of all our stakeholders, depositors, home loan customers, shareholders and staff, recognising our obligation to those stakeholders to run a sustainable bank.’