Analysts believe that home loan interest rates are likely to go up in a matter of weeks, once the election outcome becomes known.
This is despite the fact that the Reserve Bank is not expected to change the official cash rate until late this year.
According to Housing Industry Association figures published this week, the average monthly loan repayment in Victoria has hit $2238, up from $1499 a year ago,
Banks are continuing to make a huge profits even though we have seen a lot of complaints about the increased costs of funding affecting their bottom line.
Commonwealth Bank chief Ralph Norris, speaking as the bank posted a record $6.1 billion profit last week, said it “may well have to” pass on higher costs to customers.
ANZ chief Mike Smith said yesterday that the banks had to face up to “permanently higher costs of doing business”.
His bank posted a $1.3 billion profit for the three months to June.
When banks’ costs are under pressure they frequently seize on increases in the RBA cash rate to lift mortgage rates by a bigger margin.
Banks are generally reluctant to increase interest rates during an election campaign.