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Rate Rise Relay

12 April 2000

Last week was another big one for interest rates, with the Reserve Bank lifting official rates 25 basis points.

Those with home loans have now seen official rates increase a full 100 basis points in only four months.

ANZ Bank was first to move, says Internet-based research house BankChoice (www.bankchoice.com.au). It passed on the full 25 basis point rate rise to push its variable rate to 7.55 per cent.

Not to be outdone, NAB, Westpac, Commonwealth, St George and Bank of New Zealand have matched ANZ's rate, with RAMS, Aussie Home Loans and AIMS also passing on the full rise.

A trend in the competitive home loan market is the shrinking gap between the major banks and the mortgage managers, BankChoice says.

These days, RAMS variable rate is the same as that of the big banks, while Aussie is not far behind at 7.45 per cent. AIMS is a little lower at 7.08 per cent.

Not every institution has rushed to push up its rates, although the margins squeeze means most will pass on at least some of the 25 basis point rise.

Those lenders still offering variable rates at less then 7 per cent at the time of writing included AXA (6.99), Pacific Mortgage Corporation (6.99), ING Mercantile Mutual Bank (6.99), BMC Mortgage Group (6.94), Resi Home Loans (6.86), Super Members Home Loans (6.70) and Yes Home Loans (6.34), according to BankChoice.

8.38%

AUSTRALIAN SHARES

All ords accumulation index

23.40%

OVERSEAS SHARES

MSCI World Price Index in A$

4.51%

PROPERTY

ASX

Property Trust accumulation index

5.26%

CASH

SBC Warburg 90-day

Bank Bill index

1.24%

FIXED INTEREST

SBC Warburg

Composite All Maturities index

Source: MERCER FINANCIAL PLANNING ALL FIGURES SHOW RETURNS FOR THE YEAR TO 7/4/00

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