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The industry association has criticised the prudential regulator and lambasted the behaviour of the banks, accusing them of charging customers for their own “stuff-ups” amid further rate hikes of up to 40 basis points.
Following Westpac’s decision to lift home loan rates by 14 basis points, Adelaide Bank and Suncorp have also announced rate rises of up to 40 basis points.
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As of 31 August, Adelaide Bank has increased variable home loan rates for new business by up to 12 basis points, with owner-occupied home loans now starting from 3.87 per cent (4.09 comparison rate) and investor mortgage starting from 4.11 per cent (4.33 per cent comparison rate).
Additionally, as of 7 September, the non-major will increase rates on interest-only home loans for owner-occupier borrowers by 35 basis points and by 40 basis points for investor borrowers.
Further, effective 14 September, Suncorp Bank will increase all variable home loan rates by 17 basis points and lift rates on small business loans by 10 basis points.
Suncorp’s CEO of banking and wealth, David Carter, attributed the lender’s decision to the “continued rise” in the bank bill swap rate (BBSW).
Mr Carter added: “Since March, we have also witnessed a change in the outlook for the [Reserve Bank’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.”
Following Westpac’s rate hikes, executive director of the Finance Broker’s Association of Australia (FBAA), Peter White, accused the banks of punishing borrowers for their mistakes.
“Yes, the royal commission has shown the banks need to tighten things up, but why should borrowers have to pay for their stuff-ups?” Mr White said.
Mr White also accused the big banks of “greed” that is “under the guise of looking after shareholders”.
“My message to the big banks is ‘how many billions is enough — or is there no limit to this era of self-satisfying greed?” the FBAA CEO continued.
“What happens when the annual profit is $20 billion? Is that enough or where does it end? Where is the fairness for the consumer?”
Moreover, Mr White was critical of the Australian Prudential Regulation Authority (APRA) and lamented the current regulatory environment.
“A lot of the regulatory tightening that is needed now is because the banks have messed up, so why do we have to pay? Banks caused this problem, so they should fix it at their cost,” the CEO added.
“This situation is disgraceful and APRA has proven itself again to be a toothless tiger.”
Echoing comments he made last week, Mr White concluded: “The FBAA has been predicting for some time now these rises are coming and the best way to prepare for your future is through a broker as they have your interests at heart.”
[Related: Brokers called to action as rates spike]
