Suncorp and Adelaide Bank have followed Westpac’s lead on out-of-cycle rate rises for home loans, citing funding pressures for the moves.
For Suncorp, Australia’s sixth biggest home lender, it is the second rise in six months.
The moves follow Westpac’s decision to raise its variable rates by 0.14 percentage points earlier this week, with speculation the other big lenders will move soon too.
Suncorp will increase all variable home loan rates by 0.17 percentage points from September 14.
Suncorp’s small business loans will rise by 0.1 percentage points.
Adelaide Bank, a subsidiary of the Bendigo and Adelaide Bank, will raise rates on its owner-occupier and investor loans by between 0.12 and 0.4 percentage points.
Funding pressure will remain elevated
Suncorp banking and wealth chief David Carter said the decision to increase rates was based on the sustained increase in funding costs.
“In March we acknowledged the increase in the Bank Bill Swap Rate [BBSW], which has continued to rise,” he said.
Mr Carter said while deposit holders had benefited from the higher rates, the bank could no longer absorb the cost in its mortgage loan book.
“While we have been absorbing this increase, the changes announced today are necessary to ensure our ongoing ability to support lending growth for home loan, small business and agribusiness customers,” he said.
“Since March we have also witnessed a change in the outlook for the RBA’s cash rate, with movement now not expected until well into 2019.
“This means the gap between the cash rate and BBSW is likely to remain elevated for longer than we predicted six months ago.”
“We acknowledge that any increase to rates will impact our home loan customers’ cost of living, however our savings customers, many of whom are retirees, have been supported by favourable deposit rates over recent months,” Mr Carter said.
“We’re committed to reviewing home loan rates should there be a sustained improvement in funding costs.
