The Reserve Bank of Australia (RBA) raised the cash rate for the first time in more than a decade, and banks are expected to start raising interest rates in turn. How have the big four banks and other banks reacted?
After months of speculation over when rates would rise, the RBA raised the cash rate by 25 basis points to 0.35% at its May meeting, meaning Australians could see their loan repayments properties increase in the days, weeks and months ahead as lenders respond.
CommBank, ANZ, NAB and Westpac Home Loan Interest Rate Changes
The big four banks have now announced they will pass the full cash rate increase on to variable rate home loan customers, but only two have made changes to their savings rates so far.
CommBank
The Commonwealth Bank of Australia (CBA) was the first of the big four banks to announce a change to its floating rates following the rise in spot rates. It will match the RBA increase.
In a statement, Australia’s largest mortgage lender said: “In light of the Reserve Bank of Australia’s (RBA) cash rate decision, the CBA will increase variable interest rates on home loans by 0.25% per year“These rate increases will take effect on May 20, 2022.
So far, the CBA has not announced any changes to its savings rates.
ANZ
ANZ has announced that it will also pass on the full increase in cash rates, raising rates on variable interest home loans by 25 basis points. All variable rate changes will be effective from Friday, May 13, 2022, the bank said. ANZ has yet to announce any changes to its savings rates.
NAB
The latest of the big banks to move, NAB has announced changes to its home loan and savings products. He said his standard variable home loan would increase by 25 basis pointswhile its reward saver bonus interest rate will also be 25 basis points. These changes will be effective from May 13, 2022.
Westpac
Westpac said it would raise variable interest rates on home loans by 25 basis points for new and existing customers, starting May 17, 2022.
It also announced that it would increase interest rates on certain deposit accounts 25 basis points. These are the Westpac Life Savings Account and the Westpac 55+ and Retired Account.
What other lenders are raising home loan rates?
Beyond the big banks, it’s likely that most other lenders are also working behind the scenes to prepare for interest rate increases for their variable home loan customers.
For example, in a statement on its website, BOQ said: “Following the increase in cash rates from the Reserve Bank of Australia (RBA), BOQ is reviewing the rates for our savings and loan products and this what it could mean for our customers.”
More will follow as other lenders announce rate changes…
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