Two of Australia’s biggest banks join rate hike surge
Updated . First published
Two of Australia’s big four banks have increased their fixed interest rates days ahead of the Reserve Bank’s next meeting, following in ING’s footsteps.
ANZ and NAB increased their fixed rates by 0.2 percentage points on Thursday, bringing their lowest advertised fixed rates to 6.49 per cent.
ANZ and NAB have both lifted their fixed home loan rates. Supplied
It comes after ING increased its fixed interest rates for owner-occupier and investor home loans, also by 0.2 per cent, on Wednesday.
Canstar said nine lenders had now increased their rates ahead of the next RBA meeting, which was a noteworthy shift but still low-key compared to previous movements.
By comparison, in the lead-up to the last cash rate hike in May, 60 banks increased fixed rates the month before.
Canstar data insights director Sally Tindall said the question now was not if the RBA would push interest rates up again, but when.
“Today’s fixed rate hikes from two of Australia’s biggest banks is yet another sign another RBA cash rate hike is waiting in the wings,” she said.
Read more
‘There is a serious problem’: Inside Bob Katter’s controversial $75,000 baby bonus proposal
“The small but noticeable ramp-up in hikes in the last nine days is telling.”
But she said it was possible the RBA board would wait until November, with the latest inflation data not scheduled to come out until the day after the late September meeting.
“The bottom line is, if you have a mortgage, start preparing for a hike, and the time to start that prep is now, if you haven’t already,” Tindall said.
“There are currently 50 lenders offering variable rates under 6 per cent for owner-occupiers. That’s a lot of choice, for a lot of borrowers.”
Richard Whitten, money and home loans expert at Finder, said on Wednesday ING’s increase was a “clear sign” the bank expected the RBA board to raise the cash rate soon.
“Banks are experts at forecasting and setting interest rates in line with the market,” he told nine.com.au.
“They lower fixed rates when they anticipate interest rates to fall further, and lift them when they expect rates to rise.”
Whitten said ING was making sure they weren’t locking customers into rates that were “too competitive and out of step with the market”.
“ING’s move on fixed rates makes their loans a bit less competitive than similar loans from other banks, and I suspect we will see others follow suit soon,” he said.
ING has increased its home loan interest rates. AP
An ING spokesperson said the decision had been informed by recent developments in domestic and global markets.
“We regularly review pricing to reflect changing market conditions,” the spokesperson said.
“Recent developments in domestic and global markets have informed this decision.
“Following a review of our home lending portfolio, we’ve made targeted adjustments to our fixed home loan rates to support a sustainable home lending business that continues to meet the needs of our customers over the long term.”
The RBA board next meets on September 28-29.
At its two previous meetings, the board opted to hold the cash rate steady at 4.35 per cent, after three consecutive increases to kick off the year.
Two more rate hikes to come, major bank predicts
Predictions of another rate hike - or even two - have been mounting recently, with Citi and Macquarie Bank both recently forecasting a new price rise.
Citi has forecast two more interest rate hikes yet to come in 2026, a prediction of more pain for mortgage holders.
In its latest board meetings, the Reserve Bank of Australia has held rates steady at 4.35 per cent, after three consecutive increases earlier this year.
There are rising fears of another interest rate hike before the end of the year. Peter Braig/AFR
Now, Citi senior economist and analyst Faraz Syed has predicted two more rate rises before 2027 rolls around.
“This view is driven by a two-speed economy, where a deepening housing correction is offset by an AI-related investment boom that is adding to capacity constraints,” Syed said in a note released Wednesday.
“Anemic productivity, a tight labour market, and elevated oil prices likely mean inflation will remain stubbornly high, with our Q3 trimmed-mean CPI forecast at 1 per cent.
“In our view, the RBA needs to hike further to get on the front foot of inflation, though a dovish board could delay action.
“Consequently, we push our first rate cut forecast out to Q4 2027.”
Syed also lifted his prediction for where rates would peak before falling, to 4.85 per cent from 4.6 per cent.
His rates forecast comes the same week that Macquarie Bank predicted the RBA would lift the cash rate at its next meeting.
RBA Governor Michele Bullock said after the board’s most recent meeting in August that further rate hikes were on the cards as the struggle to rein in inflation continues.
And the board’s minutes revealed the possibility of a hike was heavily discussed before members decided more data was needed.
Share a tip-off, video or photo with us
