Property

Banks unlikely to lift rates

Mr Smith said although the Bank of Queensland lifted its standard variable interest rates yesterday by 10 basis points it had been one of the few lenders not to increase mortgage rates in February.
Mr Smith said although the Bank of Queensland lifted its standard variable interest rates yesterday by 10 basis points it had been one of the few lenders not to increase mortgage rates in February. Kieran Salsone

THE major banks are unlikely to increase their variable interest rates this month despite raising them independently of the Reserve Bank of Australia in February, according to a survey by leading mortgage broker Loan Market

Loan Market Corporate Spokesman Paul Smith said a survey of the company's mortgage brokers found 65 per cent expect no movement from the major lenders in March after the RBA again kept its cash rate on hold at 4.25 per cent.

Mr Smith said although the Bank of Queensland lifted its standard variable interest rates yesterday by 10 basis points it had been one of the few lenders not to increase mortgage rates in February.

"The majority of our brokers believe the major banks will leave their rates alone this month," he said.

Mr Smith said 31 per cent of the 138 broker respondents thought banks could lift their rates up to 10 basis points, while four per cent believed they could increase rates between 11 and 20 basis points. No one tipped a rate cut.

He said the industry would keenly watch the outcome of ANZ's monthly rate meeting this Friday after that bank was the first to move out of cycle last month.

"Banks made their moves last month to adjust their rates to offset market conditions that developed not just during the RBA's two month hiatus but to compensate for global conditions to which the RBA cannot influence with rate decisions," Mr Smith said.

"In the past month, we haven't seen any significant developments, from a funding perspective, to signal the major banks to raise rates above their increases last month. If they increase rates again it will only be slight posturing and nothing significant."

Mr Smith said that while it was unlikely the major banks would move their variable rates in March, some smaller banks and other lenders could feel the pressure to move if they hadn't last month.

"Borrowers should also be mindful of the wide range of variable rates available and if they are unhappy they can shop around for a better deal," he said.

Mr Smith said that a mortgage broker was well placed to run a client through a number of lender options and offer information that suited for individual circumstances and priorities.

Topics:  big banks, cash rate, interest rates, rba, variable interest rates


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