Commonwealth Bank joins ANZ to raise variable mortgage rates


Commonwealth Bank has followed its rivals in raising its variable mortgage rates, claiming an increase in financing costs.

The largest lender in Australia says that variable rates for homeowners and investors will increase by 0.15 percentage points from October 4.

Westpac was the first major lender to move forward in the latest round of gains, which occurred despite the Reserve Bank maintaining the cash rate at a record low of 1.5 percent this week, followed by Suncorp , ANZ and now CBA.

ANZ announced that it will increase its variable mortgage loan rates, following Westpac's decision last week.

The variable interest rates will rise 0.16 percent by one percentage point, starting on September 27.

Westpac announced last week that it would raise its own rates by 14 basis points from September 19.

But ANZ said customers in areas declared as dry in the region of Australia would be excluded from the change.

ANZ group executive Fred Ohlsson said the rate hike had been a "difficult decision."

"The reality is that it is more expensive for us to finance our mortgage loans in the wholesale markets and we also need to balance the needs of all stakeholders," he said.

"There is no change in the effective rates of our mortgage loan clients in the drought declared in the region of Australia that benefits more than 70,000 of our clients.

"We wanted to do our part to keep cash in the regional cities affected by the drought and we hope this will also help families and small businesses in these areas."

More to come