All four big banks have now lifted their variable interest rates on home loans following the RBA board’s July decision to lift the official cash rate on Tuesday.
Late on Wednesday afternoon, Westpac joined NAB, CBA and ANZ in mirroring the RBA’s 50-basis point lift by passing that same increase on to its customers.
Westpac said it would increase home loan variable interest rates by 0.50% p.a. for new and existing customers from July 20. The standard variable base rate for Westpac Life savings customers would also go up by 0.50% from July 22, bringing the total variable interest rate to 1.35%. Customers will be able to access a new term deposit offer of 2.50% for terms between 12 to 23 months from July 8.
“We considered several factors in making this decision including the 0.50% rise in the official cash rate and ongoing increases in the cost of funding, as well as the needs of both borrowers and depositors,” said Westpac chief executive consumer and business banking Chris de Bruin (pictured above left).
“We know that some customers will be reassessing their household budgets as home loan interest rates rise. While the majority of our home loan customers are ahead on repayments and in a good position to adapt to interest rate changes, some may find it more challenging.
De Bruin said Westpac’s dedicated team can assist customers potentially facing financial difficulty, including giving customers more time to get their finances back on track.
“We’re also engaging with our customers coming off fixed rate terms to help them understand the home loan options available and plan for future adjustments.”
NAB announced changes across its variable home loans and savings accounts, with the standard variable home loan interest rate to increase by 0.50% effective from July 15.
NAB’s reward saver account will increase by 0.50%, while its 12-month term deposit account will increase to 2.50%, both effective July 15.
NAB group executive personal banking Rachel Slade (pictured above second from left) said the team at NAB was determined to work closely with customers to provide support throughout the rapidly changing rate environment.
“Banks are here to serve their customers, so regardless of who you bank with, the first step is a conversation with a banker so we can find the best way to support you,” Slade said.
“Overall, our customers are in a good position with many ahead on their repayments. For any customer who is interested in understanding what the increasing interest rate environment means for their home loan, or concerned about their financial situation, we are here to help.”
Read more: Major bank raises interest rate
CBA was the first of the major banks to announce it would increase its variable interest rates in the wake of the RBA’s decision.
The bank raised its interest rates on the following loans taking effect July 15:
- Owner-occupier principal and interest standard variable rate home loans will increase by 0.50% to 5.80%
- Investor principal and interest standard variable rate home loans will increase by 0.50% to 6.38% pa
- Owner-occupier interest-only standard variable rate home loans will increase by 0.50% to 6.29%
- Investor interest-only standard variable rate home loans will increase by 0.50% to 6.64%
CBA group executive retail banking Angus Sullivan (pictured above second from right) said the bank was here to support its customers.
“We have a range of tools to help them manage their repayments online including aligning them to when and how often they are paid, along with tools to help them budget and track their spending in the CommBank app,” Sullivan said.
“We understand the rapidly changing rate environment may raise questions for some of our customers and we are here to help them. We encourage our customers to message us in the CommBank app to explore different support options or to connect with a home lending specialist.”
Read more: Second bank lifts its variable rate
ANZ was the second big bank to lift its variable interest rate by 0.50%, following CBA.
ANZ’s variable interest rate index changes will be effective from July 15 and apply to all ANZ’s variable interest home loan rates in Australia. ANZ is also lifting interest rates on some term deposits and savings accounts.
In making its decision, ANZ said it considered various factors including the change in the official cash rate, the impact on customers, business performance and competition.
ANZ group executive Australia retail Maile Carnegie (pictured above right) said as the cost of living had risen, some customers might be looking for support while they reconsider their household budgets.
“ANZ is here to support these customers,” Carnegie said.
“We helped nearly 100,000 customers manage their home loans through the pandemic and our teams are ready to help now with a range of support options, including a free home loan check-in that can help them reorganise their loan, so it continues to meet their needs.”
The 0.50% pa change will increase monthly repayments by $119 on an average home loan of $450,000 for an owner-occupier paying principal and interest.