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First movers have already announced rate changes following the central bank’s October rate hike.
After the Reserve Bank of Australia (RBA) announced a 25-bp increase to bring the official cash rate to 2.60 per cent on Tuesday (4 October), several lenders have announced that they will be passing the full rate hike on to borrowers.
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ANZ, CBA and NAB to raise rates from 14 October
National Australia Bank (NAB) was the first mover among the banks, with the major stating that the standard variable NAB home loan interest rate will increase by 0.25 per cent per annum (p.a), effective from Friday, 14 October.
NAB has made more than 30 rate increases on savings products since May, when rates began their upward trajectory.
Its base variable rate for owner-occupiers currently starts from 5.70 per cent (comparison 5.75 per cent) for those paying both principal and interest — meaning that the new rate will be 5.95 per cent for this home loan from next Friday (14 October).
NAB’s group executive for personal banking Rachel Slade noted that it would be supporting customers worried about the impact of increasing interest rates.
“The best first step is a conversation with us so we can find the best way to look after you — the earlier the better,” she said.
NAB has not yet confirmed whether the savings rates will increase in tandem.
This will reportedly increase monthly repayments by $63 on a variable home loan of $450,000 for an owner occupier paying principal and interest, according to the bank.
ANZ's group executive Australia retail, Maile Carnegie, said: “We know our customers have been impacted differently by the cost of living and rate changes in recent months…
“Customers who may be facing difficulties are strongly encouraged to reach out to us as soon as they can so we can discuss personalised options to support them through this time,” Ms Carnegie said.
ANZ has also revealed it will increase the rate on the ANZ Plus Save account, for balances less than $250,000 ) by 25 basis points p.a. - taking the new rate to 3.25 per cent p.a - effective from Wednesday 12 October 2022.
Similarly, the Commonwealth Bank of Australia’s home loan rates will rise by 0.25 per cent p.a. on variable interest loans from 14 October.
Group executive, retail banking, Angus Sullivan, said while it was clear customers are “feeling the impact of rising cost of living and the impact of higher interest rates on their home loan repayments”, he added that customers have been taking a “proactive approach” to managing their finances, utilising the bank’s budgeting tools and features in the app.
CBA has also said it will increase rates on its savings and term deposits - with the standard variable interest rate for its NetBank Saver rising by the full amount to 1.10 per cent p.a., effective 14 October.
It said it would increase a number of Term Deposit interest rates on 10 October (including its 12-month Term Deposit, which will rise by 1.35 per cent to 3.35 per cent p.a and its 18-month Term Deposit special to 3.70 per cent p.a).
Mr Sullivan said the bank was raising saving to help customers “navigate the current environment".
Westpac to move on 18 October
Westpac will also be passing on the 25-bp increase, with home loan variable interest rates increasing for both new and existing customers from 18 October.
At this time, the standard variable rate will move to be 7.08 per cent for P&I owner-occupier loans with a loan-to-value ratio over 70 per cent, or 6.98 per cent for those under 70 per cent.
“We know that many of our customers are looking at their finances to help manage changes to their household budgets,” said Chris de Bruin, Westpac’s chief executive consumer & business banking.
“The majority of our borrowers remain in good shape with more than two thirds ahead of mortgage repayments, and no material change in customers seeking financial support at this time.
“We’re continuing to monitor the situation and bolster our customer support teams so we can help customers navigate the evolving rate cycle.”
Westpac will also be increasing saving rates from 18 October.
The Westpac Life total variable rate with bonus interest will increase by 0.25 per cent p.a. to 2.60 per cent p.a, and Westpac’s Spend'n'Save offer for 18–29-year-olds will see eligible customers earn a total variable rate of up to 3.75 per cent p.a., an increase of 25 bps.
Westpac’s eSaver total variable rate will increase by the same amount to 2.55 per cent p.a. for new customers for the first five months.
“We’re increasing the interest rates on a range of deposit products including our flagship Westpac Life account where most customers will receive a rate of 2.60 per cent p.a,” Mr de Bruin added, stating that in reviewing interest rates, Westpac considers factors such as the cash rate, returns and market environment, as well as its borrowers and depositors.
[Related: October cash rate announced]
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