Not content with the interest rates rise, the cost of home loans is set to increase further with the major banks likely to lift their rates by a further 0.25 per cent in the next month or two
Despite today releasing record profits of $4.4 billion (up 18 per cent) the National Australia Bank has warned today that it couldn't keep absorbing the price pressures that have been added to its own cost of borrowing which, in turn, is used to fund the mortgages it offers.
NAB was the first major lender to lift its home loan rates yesterday in line with the Reserve Bank's quarter of a percentage point increase in the overall cash rate.
But it appears almost certain that NAB's home loans - and that of the other leading banks - will go up again before or just after Christmas.
Thus, regardless of the party that forms our next Government, they will be looking down the barrel at the daunting issues of housing affordability and the increasing financial tightness that families are feeling.
Simon Turner
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