Following the RBA’s 0.5-percentage-point hike last week, 18 banks have so far announced that they will raise their variable mortgage rate, with all big four banks lifting rates by 0.5% points for new and existing customers.
The change will see the lowest big four home loan rate move to 3.99%, but this rate from Westpac is only for two years, after which it will increase by 0.4%. At least 10 more lenders will likely still offer variable rates under 4% once the September hikes take effect.
RateCity.com.au compiled the post-RBA mortgage rates of the big four banks for owner-occupier paying principal and interest, with the rates to effect on Sept. 16-20:
Since the Reserve Bank started hiking rates in May, the rates of existing big four variable mortgage customers have increased by a total 2.25%. The banks’ lowest variable rates have not risen by as much for new customers, however.
“Unsurprisingly, all big four banks are hiking variable mortgage rates by the full 0.5 percentage points,” said Sally Tindall, RateCity.com.au research director. “As a result, existing customers with a $500,000 loan at the start of the hikes will soon be paying a total of $614 extra on their mortgage a month.”
While these rate hikes will take up to two months or more to hit borrowers’ bank accounts, Tindall said they should try to start making the higher repayments now.
“While money is already incredibly tight for many families, stashing any spare cash in the mortgage will help,” she said. “Unfortunately for borrowers, the rate hikes aren’t stopping here. The RBA has said there will be more increases to come, however, we are expecting the size of the hikes will slow, potentially as soon as next month.”
