CBA raises variable rates by 0.45%

[Doomy]

The CBA increase is just one the the RBA won't have to do in the future.

It might be a couple of months early but instead of a .25 from RBA the public get a .2 from the banks.

Interesting point from Pascoe on Sunrise this morning that Business Loans and Credit Card rates have been subsidizing housing loans.

They should remain the same and only housing loans should go up.

We will see how that pans out.

 

[Spectre]

Think I've said this before but interestingly with most lenders if you're behind on your mortgage then they charge you default interest on top. I believe CBA is about 2%.

So not only do you get hit with a 45 bps increase but if you cant handle it then it really can work out to 2.45% (and then some). So your rate now being say 6.8 (old rate) to 7.25% + 2% = 9.25%. I dont know if they remove the package benefits on top of this. I'd imagine they do.

Would 'subprime out of left field' be an accurate term?

 

[peaches]

The major banks currently have around 80% + of all mortgage lending and it is unlikely that the government will allow them to expand their position with any more easy take overs. They have already squeezed 30% to 40% of commissions from brokers (claiming cost pressures). As a result they have to either increase profit from market share against each other or interest margins.

It's a tight little group and they each take turns at being the bad guy - it was Westpac 6 months ago and NAB before that.

It's called business and it isn't meant to be fair.

 

[willair]

I really wonder how many CBA borrowers/home owners this will now tip over the edge and whether the bankers have thought this one through?

You have to look at the numbers first of titles holders that own their properties outright the last time i looked it was quite high%wise Australia wide,and a very large % of those would also have diversified 10-30 plus share portfolios,the numbers that will tip over the edge is anyones guess,wait till it gets too around 8%,and people stop spending..
Just watch the price of Oil,that trend leads all the others..

 

[mary&mat]

It's a tight little group and they each take turns at being the bad guy - it was Westpac 6 months ago and NAB before that.

It's called business and it isn't meant to be fair.

Completely agree peaches! I imagine they all sit down with their expensive cigars sipping cognac & draw straws for who will be the 'bad' guy this time around.

So how do people vote with their feet & find a 'better' lender when all that happens is the merry-go-round catches up with us a month or two later rates-wise?

I reckon give it til after XMas & then it'll be ANZ's turn to be the baddy.

 

[peaches]

Look at alternatives such as ING, AMP, Suncorp ... there are still quite a few options and often they are competitive. Suncorp in particular are prepared to negotiate on price and they can be very competitive. Meanwhile ING simply give outstanding service - in 9 years I have never heard a complaint about their service and if they reduce their rate on a product for competitive purposes they pass it on to existing customers.... unheard of, I know!

AMP have been aggressive lately in the lower end of the market and their processing service has faltered - but at least they are honest about it.

 

[Sunfish]

Macquarie was out of the market for a while but look to be making offers again:

http://www.macquarie.com.au/mgl/au/personal/loans/home-loans

 

[Bigtone]

Nab will go next week for sure, they r under market and have been waiting for a rba rise so they can pass on, they r desperate to go but didn't want to go first and would only go under cover of RNA rise, pretty sure anz and westpac will also go.

prediction

NAB .40%
Wpac .35%
ANZ .40%

cheers

BT

 

[Marty McDonald]

It could be that the other majors DON'T move above 0.25% and CBA are left as a shag on a rock? The others might rightly decide IMHO that the political pressure / risk of backlash is just not worth it this time. I know if I was running one of the majors I would be seriously considering not moving (but I am rational human not a profit at all costs machine). I think this non move is possible even though it would be extremely tempting for them to do so. It will be intersting to see what unfolds.

The only real solutions to real competition as I see it are:
1) Legislation forbidding any exit or discharge fees on variable rate loans (including deferred establishment fees)
2) A telephone number style system of same / transportable account numbers for transaction accounts.
3) A credit file system that includes (opt in only) an ability for the incoming lender to verify income & debts via viewing bank account transactions ie direct credits and direct dedits without having to provide actual statments. This would do away with the need to provide a great deal of paper work.

3 simple solutions that would go towards blowing away years of apathy for millions of Australians.

 

[Rolf Latham]

assignable mortgages like in the US would help

ta
rolf

 

[buzzlightyear]

Altruism is alive and kicking (you in the face that is)

The banks are doing this to help us. See what the ABA has rationalised for the increase in rates here. Not a funding issue but its to allay overseas investor's concerns of a house price bubble.

 

[sash]

Yep....just like I am Santa Clause..

The banks are doing this to help us. See what the ABA has rationalised for the increase in rates here. Not a funding issue but its to allay overseas investor's concerns of a house price bubble.

 

[Ms Jade]

The banks are doing this to help us. See what the ABA has rationalised for the increase in rates here. Not a funding issue but its to allay overseas investor's concerns of a house price bubble.

LMAO. So even though prices have pretty much stopped rising perhaps the CBA would be happier if they fell a bit? The RBA has answered the questions of the international fund managers anyway. And seeing hedge funds are betting against our housing market & making as much noise as possible to try & create the outcome, isn't it ironic that our banks are magnanimously helping them along?

 

[Bradsdad]

Nab will go next week for sure, they r under market and have been waiting for a rba rise so they can pass on, they r desperate to go but didn't want to go first and would only go under cover of RNA rise, pretty sure anz and westpac will also go.

prediction

NAB .40%
Wpac .35%
ANZ .40%

cheers

BT

I wouldn't be suprised to see NAB & Homeside go up to 0.50%.It would still see them reasonably placed and not cop too much flack given SVR still below other 3 majors assuming other predictions are on the mark.

 

[Rolf Latham]

my trifecta guess is

ANZ .25

nab .35

WBC .30

ta
rolf

 

[BV]

my trifecta guess is

ANZ .25

nab .35

WBC .30

ta
rolf

what takes them so long to decide?

 

[Rolf Latham]

what takes them so long to decide?

They decided months ago

PR spin as to when to let the cat out of the bag thats all

ta
rolf

 

[BV]

They decided months ago

PR spin as to when to let the cat out of the bag thats all

ta
rolf

Strange that they all had the same idea.
It smells collusion to me.
But can they let the days pass and then backdate an above RBA increase?

 

[Born&Bred]

It smells collusion to me.

If they all raised by the same amount on the same day, expect variances on different days.

But can they let the days pass and then backdate an above RBA increase?

Wouldn't it be illegal to backdate? isn't there a requirement to notify customers before rate changes and charges before they happen?

 

[Bradsdad]

They won't backdate it and can't.

I suspect the rest of them are letting the CBA cop a bashing and an announcment will be made (looks at clock) today. If it was going tp be just the standard RBA increase they normally announce the movement the following day so I suspect there will be some fat on top.

The quicker ALL lenders make an announcement and make the rates effective the better in my opinion. At present comparisons to the CBA's rate from other lenders is very misleading as they are using pre RBA icrease rates.