PETER MARTIN

WESTPAC has been hit by further resignations from its Community Consultative Council after it raised its mortgage rate by almost double the Reserve Bank’s recent rate rise – just one day after a round-table discussion about financial hardship.

Meanwhile, the head of the Australian Competition and Consumer Commission, Graeme Samuel, told the ABC he was not sure he would allow Westpac to take over St George if the application came before him again.

Rod Masson, the acting national secretary of the Finance Sector Union, and the president of the ACTU, Sharan Burrow, wrote to Westpac on Friday citing ”insincerity” and saying it was ”galling” that the bank’s retail chief had consulted the council about financial hardship less than a day before announcing a near-doubling of the Reserve Bank’s rate rise.

”The meeting was chaired by Peter Hanlon, the executive who less than 24 hours later announced the double hike,” Mr Masson said. ”We discussed the impact the Reserve Bank hikes would have on people who had lost their jobs and suffered reduced hours.

”We will stay in the ANZ and the National Australia Bank’s stakeholder forums, but not Westpac’s – not after this.”

The Finance Sector Union and the ACTU are the second and third groups to have withdrawn from the Westpac Community Consultative Council after the consumer group Choice, which left about two years ago. Continuing council members include the Smith Family, Mission Australia and the St James Ethics Centre.

”Westpac is disappointed,” said a spokesman, David Lording. ”But we respect that sometimes opinions diverge.”

Mr Samuel told the ABC’s Inside Business that banks such as Westpac faced less competition and found it easier to push up rates. While his decision to allow Westpac to acquire St George last year was the right at the time, he was not sure it would be right today.

“IT’S disgusting, isn’t it?”

Schoolteacher Catherine Sutton is standing where the extra bedroom should be when she delivers an assessment that neatly sums up how millions of homeowners will feel after the over-the-top rate rise by Westpac.

There is no extra bedroom or family room because the banks have taken them with their gouging.

“We have had to hold back on the renovations,” Mrs Sutton, 36, said.

“We count our pennies now, pay the mortgage and make sure the kids are fed.”

As children Lily, 8, and Charlie, 5, chase the family dogs around the backyard of their Orange home, their father Chris explains that it will be a tighter Christmas.

Courtesy of the banks.

“It limits us in terms of what we can do on holidays,” Mr Sutton, 37, said.

The Suttons, both schoolteachers, would like to switch lenders but the fees are too high and all the majors are as bad as each other anyway. “They’ve got you over a barrel,” Mr Sutton said.

Never mind the greediness of the big banks, the repeated rises from the Reserve are pain enough. “It makes it hard to get into a regular pattern of budgeting and saving,” Mr Sutton said.

Mortgage repayments are likely to push many recent homebuyers toward the brink in 2010 as rates rise beyond the expectations and budgets of many.

A Daily Telegraph survey of new entrants to the housing market – conducted before the central bank raised rates for an unprecedented third month in a row yesterday – has revealed many buyers under-estimated the extent of future RBA action.

Forty of the 100 property buyers surveyed said they expected official rates to rise by no more than 1 per cent by December next year.

Following yesterday’s 0.25 per cent increase, the survey suggests these buyers are budgeting for only three quarter-point moves in 2010. However, interest-rate futures predict as many as five more 0.25 per cent rises.

Perhaps of more concern is that even if rates do rise by just 1 per cent, more than half of the respondents said that repaying the mortgage would become a difficulty.

About 40 per cent admitted over spending their buying budget.

Nearly 90 per cent had anticipated the RBA would lift rates yesterday.

But only 17 per cent thought monetary policy action was warranted.

Close to two-thirds said the RBA was out of touch. And 90 per cent believed commercial lenders had the ability to offer better deals to borrowers.