Australian Property News

Home lenders urged to play fair

Posted on Tuesday, August 24 2010 at 1:39 PM

The Real Estate Institute of Australia has called on home finance providers not to take advantage of the current political limbo by raising interest rates.

Institute president David Airey urged banks and other home lenders not to increase interest rates above movements in the Reserve Bank cash rate.

"Without a clear outlook on who will govern Australia, the major lenders need to be responsible and make sure they do not take advantage of the political vacuum and raise margins simply because they can get away with it," he said.

Airey said the major political parties would be careful in coming weeks not to engage in disputes that could threaten their chance of government.

"Knowing that they (lenders) won't be reprimanded while the government is in caretaker mode provides an opportunity for lenders to take advantage of this situation," he said.

He called on lenders to put consumers' needs first by guaranteeing no increase in rates for home loans and small business in the current political climate.