{"id":39346,"date":"2022-07-01T09:07:39","date_gmt":"2022-06-30T21:07:39","guid":{"rendered":"https:\/\/propertynoise.co.nz\/au\/?p=39346"},"modified":"2022-07-01T09:08:26","modified_gmt":"2022-06-30T21:08:26","slug":"bank-announces-massive-hike-to-one-of-its-interest-rates","status":"publish","type":"post","link":"https:\/\/propertynoise.co.nz\/au\/bank-announces-massive-hike-to-one-of-its-interest-rates\/","title":{"rendered":"Bank announces massive hike to its interest rates"},"content":{"rendered":"

PHOTO: Mortgage rates are going only one way in 2022. FILE<\/strong><\/p>\n

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Australia\u2019s biggest bank has announced a huge hike to one of its interest rates in a sign borrowers will continue to feel the pain.<\/p>\n<\/div>\n

Financial analysts are shocked at the size of Commonwealth Bank<\/a>\u2019s fixed rate hike of 1.40 percentage points for both owner-occupiers and investors that comes into force on Thursday.<\/p>\n

\u201cToday\u2019s fixed rate hikes from Australia\u2019s biggest bank are anything but typical. We haven\u2019t seen one-off hikes of this size and scale from CBA in our records,\u201d RateCity research director Sally Tindall said.<\/p>\n

\u201cThe bank is responding to the rising cost of fixed-rate funding and a market that refuses to believe the RBA will stop hiking the cash rate at around 2.50 per cent.\u201d<\/p>\n

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A third successive rate hike is expected next Tuesday after the RBA board holds its July meeting.<\/strong><\/em><\/p>\n<\/div>\n

Ms Tindall said the one fixed rate under 2 per cent that CBA was offering less than a year ago now felt like a \u201cdistant dream\u201d.<\/p>\n

\u201cToday the bank\u2019s lowest fixed rate is just under 5 per cent, while the majority are well over 6 per cent,\u201d she said.<\/p>\n

Craig McDonald, from CBM Mortgages, said Thursday\u2019s move by CBA was one of the biggest increases the market had seen.<\/p>\n

\u201cWe\u2019ve been seeing all the banks continuously increase their fixed rates over the past few months, but generally it\u2019s been an increase of 0.25 per cent to 0.5 per cent to their existing rates,\u201d he said.<\/p>\n

\u201cI\u2019m now expecting all the other major lenders to follow suit in the next week as they don\u2019t normally leave this big a gap between competitors.<\/p>\n

\u201cWhat we are also seeing are the banks offering more aggressive pricing on their variable rates.\u201d<\/p>\n

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\"RateCity<\/div>\n

RateCity research director Sally Tindal said the hike was unprecedented. Picture: Supplied.<\/strong><\/em><\/p>\n<\/div>\n

CBA has cut its lowest variable home loan rate by 0.15 percentage points, down to 2.79 per cent, but the revised rate is only for new customers with a 30 per cent deposit.<\/p>\n

The changes come less than a fortnight after CBA hiked rates for both new and existing variable loans by 0.50 percentage points.<\/p>\n

They follow a decision by the Reserve Bank to dramatically lift the cash rate over May and June to 0.85 per cent after its historic low imposed to counter the economic shock from the Covid-19 pandemic.<\/p>\n

A third successive rate hike is expected next Tuesday after the RBA board holds its July meeting.<\/p>\n

RBA governor Philip Lowe last week said an interest-rate increase of 0.75 percentage points would \u201cnot on the table\u201d this time around.<\/p>\n

Speaking to a central banking audience in Zurich, Mr Lowe suggested an increase of 0.25 or 0.5 percentage points was on the cards.<\/p>\n

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