Commonwealth Bank has announced that as a result of increased wholesale funding costs in financial markets it will lift interest rates on its variable home loan by 0.10% per annum to 8.67% per annum.
The new variable home loan interest rates will be effective for new and existing customers from January 11, 2008.
David Craig, CFO of Commonwealth Bank, said that the move by the Bank follows large and sustained increases in cost of funding. Since the beginning of the liquidity crisis, the group has so far been exposed to additional funding costs of approximately $100 million. This has resulted from both a widening of the gap between the cash rate and the 90-day bill rate, and the significantly higher cost of debt in the wholesale markets.