Westpac has lifted its fixed rate loans across all terms for both owner-occupiers and investors on top of its 0.2% increase on January 21.
The five-year fixed now stands at 3.79%, with the four-year at 3.54% and the three-year at 3.14% – in real terms, this translates to a rise of at least $57 a month for borrowers paying principal and interest on a $500,000 loan over 30 years.
Westpac’s increase comes right after ANZ completed the big four rate rise two days ago as major banks step back from ultra-low fixed rate products. There have been more than 20 separate raises, including several banks upping their costs four times within two months in an attempt to factor in expected increases in the price of funds.
Sally Tindall, research director at RateCity.com.au, said the surge in hikes across major banks has been “unrelenting.”
“Australia’s biggest banks are no longer competitive when it comes to fixed rates,” Tindall said. “Over the last two years, the big four fought hard to offer competitive fixed rates. Now they’ve completely turned their backs on the fight.”
According to RateCity.com.au, most major banks have fixed rates starting with 3, but there are still 21 fixed rates and 63 variable rates under 2%. Tindall warned potential mortgage holders to act fast as the number of banks with low rates is “becoming harder to find.”
It was also noted that there are 63 variable rates still under 2% - but this figure is down from 71 in January of this year.
“The drop in the number of variable rates under 2% could be one of the first signs the variable rate war is coming to an end,” Tindall said. “In six months, the variable rate market could look entirely different, particularly if the RBA hikes the cash rate in August as many economists are predicting.”
