Commonwealth Bank Lifts Home Loan Interest Rates
4 April 2008
The Commonwealth Bank today announced that as a result of continued increasing costs in wholesale funding it was lifting its variable rate home loan interest rates by 0.12% pa. This means that the Bank’s standard variable rate home loan will increase from 9.32% pa to 9.44% pa and its basic variable home loan from 8.81% pa to 8.93% pa. The new rates will be effective from Wednesday 9 April 2008 for new and existing customers.
Variable interest rates on some business loans will also increase by 0.12% pa, effective 9 April 2008.
Group Executive Retail Banking Services, Ross McEwan said, "The Commonwealth Bank has absorbed a significant proportion of the increased funding costs that it has experienced since August 2007. For the four month period to 31 December 2007, these increased costs amounted to around $100 million. Unfortunately, the volatility in global markets remains and we have seen funding costs continue to increase, particularly since February as funding from global markets has become tighter and as a result more costly."
"Despite this latest increase, which can be directly attributed to the increased cost of funding experienced by all banks, we are still maintaining a balance between the needs of shareholders and customers by continuing to absorb a significant portion of the additional costs being incurred."
"The majority of Commonwealth Bank variable rate home loan borrowers have a buffer as they are already paying more than the required amount. Notwithstanding this, customers are encouraged to review their financial position and budgeting in light of this interest rate increase to ensure that their arrangements remain appropriate for their circumstances. Those customers who are seeking some assistance or financial advice should contact their branch or our home loan hotline on 13 22 24. We can discuss with them alternative arrangements, such as extending the loan term or perhaps switching to a fixed interest rate," Mr McEwan added.
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