FURTHER variable mortgage rate increases were unlikely in the current round of rate adjustments by the major banks, a senior executive with one of the nation's Big Four lenders has said.
As more banks hiked their fixed-rate home loans yesterday, the executive, who requested anonymity, played down the prospect of other lenders following the lead of the Commonwealth Bank, which last Friday controversially lifted its variable rate by 10 basis points to 5.74 per cent.
He noted that, before last Friday, there was a 17 basis-point gap between CBA, which had the lowest variable rate at 5.64 per cent, and National Australian Bank and ANZ, both pegged at 5.81 per cent.
"CBA was missing out on $200-$300 million in annual revenue given the size of its book," the executive said.
"That wasn't sustainable, and they were probably writing lower-quality loans, despite toughening their lending criteria.
"Also, if you increase your fixed-rate loans (like NAB, Westpac and St George Bank did yesterday), why lift the variable rate on another day and risk getting slapped around a second time?"
CBA cited rising wholesale funding costs and intense competition for deposits as the reason for last week's unpopular move.
But senior government ministers lined up to condemn the nation's biggest home lender, with Kevin Rudd saying Australians had a right to be "furious", and that the bank's action had undermined the economic recovery.
Wayne Swan accused CBA, which also lifted the price of a range of fixed-rate products, of being "selfish".
Yesterday, Westpac, NAB and St George Bank followed CBA's fixed-rate lead.
Westpac jacked up its one-year product by 10 basis points, with the two-year loan up 20 basis points and all other terms out to 12 years up 50 basis points.
NAB took similar action, moving fixed-rate loans of two-10 years' duration up in a range of 15-40 basis points.
General manager of mortgages Steven Shaw said NAB had decided last Thursday to raise the price of its fixed-rate home loans, but this would have no impact on any consideration of the variable rate.
"We have no current plans to lift our variable rate," Mr Shaw said.
