Big banks raise mortgage rates after RBA interest hike

Australia’s big four banks moved to raise mortgage rates in line with the RBA’s interest rate hike for the first time in more than a decade.

Commonwealth Bank, ANZ, Westpac and NAB all passed on the RBA’s full 25 basis point hike, which saw the rate rise from 0.10% to 0.35%, marking the first hike rates since November 2010.

Learn about the RBA’s interest rate hike with Australia Today’s Steve Price and Sky News Business Editor Ross Greenwood

The ABC announced on Tuesday evening that it would pass on the rate hike to its customers from May 20, while ANZ will also raise rates on variable interest home loans by 0.25% from May 13.

Westpac then followed suit by raising its variable interest rates on home loans by 0.25% for new and existing customers, and on Wednesday morning NAB increased the standard variable home loan by 0.25% to 4, 77% and the reward saver bonus interest rate is increased by 0.25 percent.

The move comes just three weeks before the federal election, with the RBA raising rates ahead of the expected June announcement in a bid to remain independent of politics.

“We have operational independence and it is a testament to Australia’s political culture that independence is respected. We make our decisions in the best interest of the country: this is what we have always done and what we have done today”, Reserve Bank Governor Philip Lowe mentioned.

Meanwhile, Treasurer Josh Frydenberg told Channel Nine it was not his place to comment on the RBA’s timing.

“It’s an independent reserve bank and it’s not for me to criticize the board for the decisions it makes,” he said. “But it hopefully reinforces in people’s minds the importance of sound economic management.”

However, as pressure mounts on the Coalition to take responsibility for rising inflation, shadow treasurer Jim Chalmers promises a Labor government will help solve the problem.

“Whether it’s tackling a skills shortage, making it easier for people to work more and earn more by reforming the childcare system, whether it’s investing in secure, well-paying jobs in areas such as advanced manufacturing, the digital economy, the care economy”

“These things are becoming even more important and they are at the heart of our economic plan,” he told Channel Nine.

Economists had expected a higher rate hike after last week’s inflation report.

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