(Adds Westpac comment)
SYDNEY, March 17 Australia's Westpac Banking
Corp said on Friday it will raise mortgage rates across
a range of products including for owner occupiers, a day after
rival National Australia Bank made a similar move.
Westpac will increase its variable home loan rate for owner
occupiers by 3-8 basis points, it said in a statement. Variable
rates for property investors will be raised by 23-28 basis
On Thursday, NAB became the first of the country's Big Four
lenders to raise mortgage rates, a move that in part will be
welcomed by regulators desperate to cool runaway real estate
Westpac said its decision was based on a "number of economic
and regulatory factors."
"Today's changes are in response to increasing funding
costs," George Frazis, chief executive of Westpac Consumer Bank,
said in the statement.
"Despite home loan interest rates being at historically low
levels, both deposits and wholesale funding of mortgages have
increased over the last nine months."
On Wednesday, Commonwealth Bank of Australia, the
nation's largest mortgage provider, and subsidiary Bankwest said
they will raise interest rates and toughen lending conditions
for investment property buyers. It did not raise rates for owner
Their decision comes at a time when the Reserve Bank of
Australia kept its policy rate at 1.50 percent for an eighth
straight month in March.
While the moves will likely help hose down the heat in the
country's red-hot housing market, economists say raising rates
for owner occupiers, in particular, could have negative
consequences for the A$1.7 trillion economy.
Data out on Thursday showed the country's jobless rate was
at a 13-month peak. Besides, household spending has been subdued
amid record low wages growth.
Home prices in major cities jumped 11.7 percent in the year
through February, while in Sydney they shot up 18.4 percent.
RBA Governor Philip Lowe recently devoted a lot of attention
to the risks in Australian housing market, including the dangers
of a debt-fuelled boom and bust.
(Reporting by Swati Pandey; Editing by Muralikumar Anantharaman
and Subhranshu Sahu)