Westpac hikes interest rates after recording a $4.2bn half year profit

Westpac has pushed interest rates

Westpac has pushed interest rates

"This is a tough decision but we have a responsibility to price our mortgage products in a way that reflects the reality of our funding costs", says George Frazis, Chief Executive, Westpac Consumer Bank. "In particular the bank bill swap rate, which is a key wholesale funding rate for mortgages, increased by about 25 basis points between February and March this year and has remained elevated".

Westpac shares extended gains after the announcement, to be up 3 per cent at 3.56pm Sydney time.

The Australian has predicted that other major lenders including Commonwealth Bank, National Australia Bank and ANZ will announced similar interest rate interests in the near future thanks to the rising wholesale funding costs.

Shrugging off intense pressure, Brooke Henderson wins Canadian Women's Open in style
This was like the first time ever that I've played my absolute best in front of the hometown crowd and on home soil. She lost her other grandfather, Clem Henderson, on August 5 at the age of 85.

Banks lifted the Australian sharemarket back towards ten-year highs, despite a flat lead from Wall Street last night and renewed emerging market weakness, with a late surge in the lenders after Westpac was the first to raise its variable mortgage rate. "Given the step change in our funding costs, we have made what we believe is the appropriate decision: to balance the interests of all of our stakeholders". Resentment that a 2016 central bank interest rate cut wasn't fully passed on to borrowers helped stoke a sense banks were gouging customers, and fueled calls for the inquiry.

The S&P-ASX 200 index got off to a slow start but buying momentum gathered throughout the session, and with one hour of trade to go the market was up 0.4 per cent.

In other moves, Westpac raised: owner-occupied interest-only mortgages to 5.97 per cent, investor P&I loans to 5.93 per cent, and investor interest-only loans to 6.44 per cent. The second most important factor is what borrowing costs are elsewhere. Owner-occupiers with a standard variable home loan will see their interest repayments increase to 5.38% while interest only loans will increase to 5.97%.

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