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Banks set to raise variable mortgage rates

The RBA did not cut official interest rates on Tuesday leading some economists to predict that the big banks will raise their mortgage rates to cover increased funding costs in a move that would raise the ire of politicians and borrowers

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16 Feb 2012

The RBA did not cut official interest rates on Tuesday leading some economists to predict that the big banks will raise their mortgage rates to cover increased funding costs in a move that would raise the ire of politicians and borrowers.

UBS banking analyst Jonathan Mott warned the surge in global funding costs meant the banks were now losing money on every mortgage they had written in the past four months. Mr Mott estimates the banks may need to lift their standard variable home loan rate by 10-15 basis points to make mortgage lending viable again.

Source: Herald Sun

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