By Romesh Navaratnarajah: Australia and New Zealand Banking Group (ANZ) has announced that its mortgage rate will remain at 6.9 percent, following the Reserve Bank of Australia's (RBA) decision not to reduce the cash rate this month.
The move to maintain the lending rate was driven by the need to remain competitive amid higher funding costs facing the bank, said Philip Chronican, Chief Executive of ANZ (Australia).
"We know that many Australians are feeling uncertain about the global economy and with household budgets under increased pressure this was another factor in our decision this month."
ANZ's decision comes after the Reserve Bank maintained the cash rate at 3.5 percent following cuts in the last two months.
The Reserve Bank previously reduced the cash rate by a quarter of a percentage point last month and by half a percentage point in May due to the mixed outlook for domestic growth and the Eurozone debt crisis.
The situation is still volatile even though offshore funding markets, which are utilised by banks to source for money to lend to clients, have started to stabilise, added Chronican. Related Stories: UK lenders cut mortgage rates
35% drop in US mortgage fraud cases
Fixed-rate mortgage in demand despite cheaper tracker-rate loans