CBA & ANZ Rates Rise To Net $1 Billion

There's much in common with Australia's big four banks.

They make billions in profits every year, they continually rank very low in the eyes of their customers and the community and they seem to follow each other when it comes to interest rates.

Just this week, the Reserve Bank of Australia (RBA) confirmed they were keeping the official cash rate on hold at 1.5% for a record 25th straight month.

That was after Westpac, St George and Suncorp Bank had all decided to raise their variable interest rates.

Now just two days after the RBA announcement, ANZ and the country's biggest lender CBA, have both decided they want more of their customer's money.

Within the space of minutes the two big lenders announced a rise of 0.16% (ANZ) and 0.15% (CBA) for their variable rate home loans.

The decision to raise their rates, outside of the RBA's decision this week, is set to earn them an extra $1 billion in income between them, at the expense of their customers.

"This was a difficult decision given we know the impact rising interest rates have on family budgets," said ANZ in a statement

"The reality is it is more expensive for us to fund our home loans on wholesale markets and we also needed to balance the needs of all stakeholders."

As for CBA's response, "We are very conscious of the impact that increasing interest rates will have on our customers, however it is important that we price our home loan products in a way that reflects underlying costs.”

In May this year, ANZ announced a 14% increase to their half year profit to $3.3 Billion, off the back of an 18% full year increase to $6.69 billion in 2017.

This year the CBA announced a fall in net profit of 4% to $9.38 billion, after having to spend $1.1 billion in fines and cost associated with an ASIC investigation, shareholder class actions, AUSTRAC proceedings into money laundering, the banking royal commission and an APRA inquiry.

So plenty of profits still flowing for the major lenders, despite the costs associated with scandals and illegal activity.

So do you think and extra billion is a fair collective slice to pay if you're a CBA or ANZ customer?

Do you have an ANZ or CBA home loan? Are you now paying too much?

Time to review your home loan - get in contact with us for our free service that reviews your current home loans and identifies if you can get a better deal.