“I think the industry as a whole is facing a similar situation that funding costs day-by-day are continuing to increase; it’s just a fact of the market.
The fact of the matter is, over time, interest rates being charged will increase unless we see significant drops in rates both internationally and locally.”
– Ralph Norris, CEO of the Commonwealth Bank
Ouch. So the head of Australia’s second largest bank, the Commonwealth, is forecasting a rough year ahead for those of us on a mortgage. And the Governor of the Reserve Bank, Glenn Stevens, is also saying that inflation must be kept under control at 2-3%, and that increases to the mortgage rates are an effective way of keeping inflation to an appropriate level. So we’d better hope that inflation stays down … although some of the big banks might put their rates up anyway, just to keep us guessing.