Lowe Says Mortgage Rate Spread to RBA Benchmark at 270 Points

Australian mortgage rates have widened relative to the central bank’s benchmark borrowing cost because of more expensive funding and greater competition for deposits, Reserve Bank Deputy Governor Philip Lowe said today.

“What we are seeing as a result of both market and regulatory developments is an increase in most interest rates in the economy relative to the cash rate,” Lowe said in the text of a speech in Melbourne. “This increase is due partly to the global loss of trust in financial institutions, which has led to all banks paying more for funds in capital markets.”