ANZ Bank announced on Friday that it would raise it fixed home loan interest rate by 20 basis points to 6.34 per cent. It is the first among the big four to adjust interest rates after the Reserve Bank of Australia (RBA) retained this week the current overnight cash rate at 4.25 per cent.
The news, however, did not surprise Australians because ANZ has announced earlier this year that it would be independent of RBA policies and instead announce its interest rate decisions every second Friday of the month.
However, the first Australian bank to adjust upward its interest rate right after the RBA decision was the Bank of Queensland which increased its interest rate to 7.46 per cent from 7.36 per cent, matching Westpac's current rates. Suncorp also announced on Friday that it hiked the two-year fixed home loan rates by 16 basis points to 6.14 per cent.
ANZ just cut the three-year fixed package rate in February by 15 basis points to 5.99 per cent.
Other major Australian banks are expected to raise their own rates soon.
However, RateCity Chief Executive Officer Damian Smith said the rate increased by Suncorp and ANZ on their fixed rates is not an indicator that lenders would also boost their variable rates but he did not discount the possibility since banks would likely cite continued pressure on funding costs to justify rate upward adjustments.
Mr Smith warned home borrowers to anticipate several small 10-basis point increases throughout the rest of 2012.
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