CBA The Latest Bank To Hike Fixed Rates

The latest bank to increase its fixed - lending rates is Commonwealth Bank.

The Australian has reported that CBA revealed earlier this week that they would be increasing fixed rates by 50 basis points to 6.19 per cent on their one-year fixed loans, while a new two-year fixed rate mortgage would become 30 basis points more expensive at 6.84 per cent.

A three year fixed home loan will now be 7.29 per cent up 15 basis points, while a five-year loan will be 10 basis points higher to 7.69 percent.

After being under consideration by CBA for more than a fortnight, the bank's interest rate committee voted on Monday to implement the increases.

Steve Batten spokesman for CBA stated that the bank still faced higher funding costs on its fixed rate loans, despite conditions in the global money markets starting to settle after the global financial crisis.

CBA has not altered the fixed rates on their five-to-15 year loans because their funding forecasts have been very accurate.

CBA's standard variable rates have also not changed, but financial markets are expecting a rush of interest rate rises to be ordered by the Reserve Bank.

The chance of an October rate hike is fairly unlikely, but the markets and economists are united that a November increase from the RBA looks likely.

The financial markets have predicted that the official cash rate could be up by 1.7 per cent higher by September next year.

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Published on September 9-th, 2009 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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