Westpac will raise variable home loan rates by 14 basis points, effective from September 19, due to an increase in its wholesale funding costs.
Australia's central bank has kept the official cash rate at a record low 1.50 per cent since 2016 and signalled a steady path for some time.
The Australian dollar exchange rates are displayed on the Australian Stock Exchange (ASX) trading board in Sydney. Source: AAP Image/Mick Tsikas
Westpac on Wednesday said it's variable mortgage rate for owner-occupier properties will increase to 5.38 per cent per annum for customers with principal and interest repayments, while the rate for residential investment properties will go up to 5.93 per cent.
The move knocked the Australian dollar lower on speculation that other lenders will follow Westpac and that might ultimately force the Reserve Bank of Australia to take an easing stances on interest rates to offset the rate rises in the market.
The Australian dollar was at 73.03 US cents at 1700 AEST, down from 73.45 US cents on Tuesday.
