While numerous major and non-major lenders have announced interest rate cuts this week, a prominent voice in the mortgage broking industry believes the second half of 2016 will see lenders look to hit borrowers in their back pocket.
With the Coalition now announced victorious following a drawn out conclusion to this month’s federal election, 1300HomeLoan managing director John Kolenda believes Australian banks will look to recoup the new costs they are facing by raising interest rates.
“Major lenders have been assessing options to reprice but have delayed making any moves due to the attention put on them by both political parties and awaiting the outcome of the federal election,” Kolenda said.
“The banks need to lift rates in response to rising funding costs and the additional costs they face for the extra compliance and regulatory increase on reserves they had to have in place by the end of June this year,” he said.
“Banks will be eyeing repricing opportunities and look to lift rates out of cycle sometime in the second half of this year now the election is out of the way.”
Even with the Reserve Bank of Australia widely tipped to announce a cut to the official cash rate after its August board meeting and lenders becoming increasingly competitive in their rate offerings, Kolenda said “the conditions for rate hikes remain.”
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