Rates:up they go

As expected, the ANZ today became the first of Australia’s big four banks to increase the rates it charges on most of its home and small business loans.

The bank said it would increase its variable rates for mortgages and small business increase by 0.06 per cent.

However the bank also said it would reduce the rate it charges on its three year fixed rate package mortgages by 0.15 per cent.

These figures reflect a carefully measured response to the higher funding costs the ANZ – and Australia’s other big banks -  now have to meet as a result of pressures arising from the European debt crisis.

The Commonwealth, Westpac and National Australia Bank will be studying the ANZ’s announcement very closely.

But the Federal government won’t be impressed.

The Treasurer, Wayne Swan, says the big four banks have “huge profitability.”

He is advising customers of banks which raise their rates  to “walk” to get a better deal from credit unions, smaller banks or other financial institutions.

The ANZ insisted, though, that its rates would remain “competitive.”

“ The 0.06% increase would add $6.50 per fortnight to the average home loan of $280,000,” the bank said.

“For small-to-medium sized business customers, the increase will add $3.00 per fortnight to an average loan of $130,000,” it added.

“ Most customers will not need to make additional repayments with 85 per centof ANZ mortgage customers already ahead on their repayments,” the bank added.