Westpac forecasts higher interests rates: Borrowers warned to brace for higher repayments
Monthly repayments could soon cost borrowers a lot more cash if Westpac’s predictions for rate rises do come to fruit...
The major banks should keep their interest rates on hold in March, a new survey has revealed.
According to a recent survey by Loan Market Group, 65 per cent of brokers believe there will be no increase in rates from the big four while 31 per cent think there will be a rise of 1 to 10 basis points.
But while a majoirty of brokers believe the majors will leave their rates alone, there are indications from the lending industry that further price hikes could be on the horizon.
Advantedge's general manager distribution Brett Halliwell told Smart Property Investment's sister publication The Adviser earlier this week that higher cost of funds will force the banks to lift their rates in the near future.
“On average, banks source approximately 30 per cent of their funds from markets that have seen costs of funds rise by 100 basis points at least,” he said.
“That is why we have seen out of cycle rate hikes and I wouldn’t be surprised to see more still as the banks look to pass on the higher costs of funds.”
However Loan Market spokesman Paul Smith believes these costs were covered last month when the major lenders broke cycle from the RBA.
“We haven’t seen any significant developments, from a funding perspective, to signal the major banks to raise rates above their increases last month.”
All eyes will now be on ANZ when it reviews its rates this Friday.