Westpac last of big four banks to move on rates

Westpac is the last of the big four banks to announce its variable home loan rates will increase in line with the official cash rate increase announced this month.

The three other major banks – CBA, ANZ and NAB – have already declared they are passing on the 50-basis point interest rise in full, with NAB and ANZ making their move late Friday afternoon, with CBA following shortly after. The higher rates for these three banks take effect on September 16.

Macquarie Bank said it would also lift is variable home loan rates by 0.50%.

Four non-major banks – ING Australia, Bendigo and Adelaide Bank, Macquarie Bank and Suncorp Bank – have confirmed a 50bp increase in variable home loan rates.

Read more: RBA announces interest rate move

Following the latest RBA monetary policy statement on September 6 in which the cash rate rose to 2.35%, RateCity.com.au confirmed 18 lenders had announced increases to variable home loan rates. Here's the list: 

Greater Bank has announced a 0.45% increase: the only lender so far to have passed on less than the official cash rate increase, the website confirms.

Westpac announced on Monday morning that its variable home loan rates would increase by half a percentage point (0.50%) for new and existing customers, effective September 20, 2022.

Westpac chief executive consumer and business banking Chris de Bruin (pictured above left) acknowledged that many households are managing their budgets. The bank would support customers through the changing interest rate cycle, he said.

“When we review our interest rates, we seek to balance the needs of multiple stakeholders including home loan and deposit customers,” de Bruin said.

 “We also consider several factors including the increase to the cash rate, competitive environment, and the performance of our business,” de Bruin said.

Interest rates on Westpac savings and deposit accounts had increased over the last five months, he said.  Effective September 20, the Westpac Life total variable rate would increase by 0.50% to 2.35%, and for under 18-year-olds, Westpac Bump Savings would increase by 0.65%, to 2.35%.  Additionally, term deposit offers were available to support savers.

“While we have not seen a change in customers seeking financial assistance, we’re monitoring the situation carefully and expanding our customer support teams so we can continue to provide tailored care to those who need it,” de Bruin said.

Westpac encourages customers needing assistance with their home loan repayments to contact the bank, which would “find a solution to support their circumstances”, he said.

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Effective September 15, ING Australia has confirmed all variable home loan rates for new and existing customers will increase.

The bank has also announced it would increase its ongoing variable savings interest rate, enabling eligible new and existing savings maximiser customers to earn an annual interest rate of 3.60%. The interest rate on its savings accelerator offerings would also increase by 0.50%.

Another non-major bank, Bendigo and Adelaide Bank, announced on Friday that the interest rate for variable rate loan customers would increase by 0.50%, effective from September 16.

Bendigo and Adelaide Bank chief customer officer for consumer banking Richard Fennell (pictured above right) said the bank carefully considers the impact of rate rises on all customers.

“We understand that rising inflation and higher rates can make it tougher for borrowers. Please remember we are here to help and have a team standing by ready to assist,” Fennell said

Macquarie Bank has also confirmed its variable home loan rates will increase by 0.50%, effective September 16.  The bank has also lifted interest rates across several of its deposit products, including the savings account welcome rate, ongoing savings and everyday transaction account rates, and the interest rate applying to its cash management account.

Suncorp Bank said its home loan variable rates will increase by 0.50%, effective September 16. For every $100,000 of loan balance remaining on a 25-year variable loan, a customer could expect their monthly repayments to increase by around $26, the bank said.

PropTrack has released estimates of the 50-basis point cash rate increase on monthly mortgage repayments.

In greater Sydney, based on a median 12-month sale price of $1.075m and borrowings of $860,000, the 0.50% increase would amount to an extra $249 per month. In greater Brisbane, it would amount to an extra $146 per month (median 12-month sale price of $630,000, borrowing of $504,000), and in greater Melbourne, it would amount to an extra $186 per month (median 12-month sale price of $803,000, borrowing of $642,400).

Read more: What is RBA’s next interest rate hike?

The lagged effect of rate rises, the large portion of borrowers ahead on their repayments and some borrowers still on fixed rate home loans, meant mortgage holders had not yet felt, or were only starting to feel the impact of the initial rate rises, PropTrack said.