Westpac races ahead as RBA increases rates by 25bps
As expected the RBA raised the cash rate by 25bps which will mean an increase of $45 on the average mortgage. Westpac however reflecting the cost of raising funds have increased their rates by .45%.
Whilst commentators will criticize Westpac for this, its interesting to note, it would appear that costs of funds is increasing, certainly competition for deposits is hotting up with many banks offering rates close to standard mortgage rates in order to fix depositors in to long terms.
Its obvious to me that if one of the major banks can raise rates without fear of their competitors undercutting them, they have little concern about competition or loss of customers, Westpac was not the cheapest of the big 4 banks either with their standard variable already more expensive than CBA so it doesn’t appear that they are concerned about being priced at a higher rate than the other banks.
At the time of publishing the ANZ, CBA and NAB had not announced any rises, perhaps they are waiting until the smoke clears until they make their move.
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