Big four banks hike interest rates after RBA decision
The big four banks have passed on this week’s interest rate rise in full more than a day after the Reserve Bank of Australia confirmed it had hiked the official cash rate for the fourth time this year.
The RBA increased the official rate to 4.60 per cent, which is an almost 15-year high.
Commonwealth Bank confirmed on Wednesday it would increase home loan variable interest rates. AAP
Commonwealth Bank confirmed on Wednesday it would increase home loan variable interest rates by 0.25 percentage points.
The bank’s group executive of retail banking Angus Sullivan said the RBA’s decision comes as persistent inflation and continued global uncertainty contribute to broader economic pressures.
“Each customer’s circumstances are different, and our teams are ready to provide support, help them understand their options and consider what might work best for their situation,” Sullivan said.
“For some customers, the immediate priority might be understanding how their repayments and budget may change and where adjustments can be made.
“For others, it may be having a more detailed conversation with us about their finances.”
Westpac has confirmed it would increase variable home loan interest rates by 0.25 percentage points per for owner-occupier and investment property loans.
Westpac chief executive of consumer Carolyn McCann said the ongoing tightening cycle continues to place pressure on household budgets.
“We recognise that another rate increase will add to cost-of-living pressures for many households,” McCann said.
“Our priority is supporting customers through this period and helping them stay on top of their finances. We have a range of support options available and encourage anyone who may be feeling under pressure to contact us early.”
“At the same time, higher interest rates on deposit accounts will be welcome news for customers looking to grow their savings.”
ANZ confirmed it would pass on the hike for variable home loan customers by and continue to review other interest rates.
Westpac has also confirmed it would increase variable home loan interest rates. Lisa Maree Williams/Getty Images
“Customers who need additional support are encouraged to get in touch. Our team is here to listen, understand their circumstances and work with them on options to manage their home loan repayments,” ANZ group executive of Australian retail Pedro Rodeia said.
The bank said the hike would increase monthly repayments by approximately $79 on a variable home loan of $500,000 for an owner-occupier loan with principal and interest repayments.
After confirming NAB would pass on the hike, group executive of personal banking Ana Marinkovic encouraged customers concerned about their finances to reach out early.
“Many homeowners will be looking at what this decision means for their household budget and monthly repayments,” Marinkovic said.
“Some customers may be concerned about the impact of higher repayments, particularly as household budgets remain under pressure.
“Our focus is on helping customers understand what has changed and where they can turn for support if they need it.”
The changes for all four banks will come into effect on October 9.
Macquarie Bank announced on Tuesday that it would pass on the rate rise to customers.
Its variable home loan reference rates will be increased by 0.25 per cent from October 15.
Nine money editor Effie Zahos on Tuesday said Australians have not seen rates this high since 2011.
“You’ve got to remember the price of property then was about half a million, it’s now $1 million. This will add $114 extra per month onto, say, an $800,000 or $750,000 mortgage.
“In isolation, we’ve been resilient and have been able to handle that. But this is the fourth one — that will mean an extra $450 per month. What that means is, for $450 a month, you could pay off a $20,000 car loan.”
She noted that the figure adds up to about $5,400 extra over 12 months.
“That would feed a family of four six months' worth of groceries,” she said.
“It means households will have to look for ways to keep cutting back, when really, a lot of us are probably on bare-bones budgets as it is.”
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