Reserve is doing its bit, but greedy lenders nudging up interest rates on the sly
The Reserve Bank of Australia has kept the official cash rate on hold for four months in a row but many lenders have been nudging their mortgage rates higher.
Australia’s central bank opted to keep interest rates steady at the October meeting as was widely expected by economists and markets.
Despite the extended pause in the official rate, lenders have still been adjusting their fixed and variable mortgage rates higher, according to comparison site Canstar.
Almost half of the 90 variable rate lenders on the site have increased their variable rates while the central bank has kept interest rates steady at 4.1 per cent.
The out-of-cycle increases averaged 0.15 per cent.
Canstar money expert Effie Zahos said lenders were attempting to claw back profit margins.
You might like
“Homeowners need to make sure they are still on the sharpest rate,” she said.
Tuesday’s cash rate decision marked the first under new Reserve Bank Governor Michele Bullock, after she took over from Philip Lowe last month.
The latest data flows are yet to throw off the RBA’s plan to bring inflation back to target by late 2025, although the post-meeting statement did nod to the emerging risk of rising fuel prices.
Higher prices at the pump helped bump headline inflation in August’s monthly consumer price index.
Despite the acceleration, economists expect the board to wait for the comprehensive set of inflation data in the quarterly report, due out later in the month.
