Big four lift rates in wake of RBA’s 4th hike

By Sam Nichols | 04 August 2022 | Mortgage Business

Lenders have begun to respond to August’s 50-bp lift, with all of the big four banks passing on the full rate.

Earlier this week, the Reserve Bank announced it would be lifting the cash rate by another 50 basis points, bringing the figure to 1.85 per cent. 

Following the announcement, several lenders have confirmed that their variable rates will be increasing as a result of this latest bump. 

ANZ, CBA and NAB announce mortgage rate lifts for 12 August

On Thursday (4 August), both Australia and New Zealand Banking Group (ANZ), Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB) confirmed that their variable rates would lift by 50 bps from 12 August. 

Under these changes, CBA’s owner-occupier principal and interest (P&I) standard variable rate home loans will increase to 5.80 per cent per annum. 

Interest-only repayments are set to lift to 6.29 per cent per annum. 

For investors, P&I variable rates will lift to 6.38 per cent per annum, while interest-only investor loans will bump to 6.64 per cent. 

CBA group executive, retail banking, Angus Sullivan, commented that the big four bank has “been helping customers understand the changing rate environment and consider what it means for them”.

Mr Sullivan added that CBA “will continue to be there” for its customers.

At the time of writing, ANZ’s variable index rate of an owner-occupier P&I loan was 5.64 per cent per annum, with interest only at 6.19 per cent per annum. 

Investment loans with P&I repayments are 6.24 per cent per annum, while interest-only repayments are 6.49 per cent per annum. 

Further, NAB’s base variable rate for owner-occupier with P&I repayments is 4.70 per cent per annum, and 5.27 per cent for interest only repayments.

For investors with P&I repayments, the base variable rate is 5.22 per cent per annum, and 5.60 per cent per annum with interest only repayments.

As well as raising mortgage rates, both CBA and ANZ have confirmed that they will hiking their savings rates. 

From 12 August, CBA’s NetBank Saver standard variable interest rate will lift to 85 bps per annum. 

Further, ANZ has said that, from Monday (8 August), the rate on Plus Save accounts with balances of less than $250,000 will lift to 2.50 per cent per annum. 

ANZ group executive Australia retail, Maile Carnegie, commented that the bank is aware that the “persistent low-rate environment of recent years has been challenging for savings customers”, and that the bank is making attempts to “provide some relief for them with a range of deposit rate increases”.

Ms Carnegie added that the bank is also aware that the cost-of-living pressures will impact some of its home loan customers more than others, “so we have a number of support options available to help customers understand how these changes will affect them and what they can do about it”.

From 12 August, NAB’s iSaver account will increase to 1.80 per cent per annum, while its 12-month term deposit is expected to reach 3.00 per cent per annum. 

Westpac confirms variable hike from 18 August

Westpac Banking Corporation (Westpac) has also confirmed it will lift its variable rates by 50 bps, with these changes coming into effect from 18 August. 

At the time of writing, Westpac’s basic variable rate for owner-occupiers with P&I repayments was 3.24 per cent per annum 

For investors, this was 3.64 per cent per annum.

However, Westpac has also announced that, from Tuesday (9 August), it will offer a four-year fixed rate of 4.99 per cent per annum for owner-occupier customers on P&I repayments with the Premier Advantage Package. 

Chris de Bruin, Westpac’s chief executive, consumer and business banking, commented that the bank understands this change to interest rates will mean “many customers will be reviewing their budgets”. 

He said that the bank also recognises that, while some customers are ahead on repayments, others “may be feeling more financial pressure” following successive hikes. 

“We’re also putting a competitive fixed rate offer on the table to help give our customers more options as interest rates rise,” Mr de Bruin later said. 

“New and existing customers could fix their loan for four years which may provide more certainty over their repayments, or split their loan between fixed and variable rates.”

Westpac has also confirmed that it too will be increasing its saving rates by 50 bps from 18 August. 

These include Westpac Life’s total variable rate increasing to 1.85 per cent per annum and the bank’s eSaver standard variable rate bumping to 85 bps per annum. 

Non-majors to increase rates from next week

Among the non-major banks, both Macquarie Bank and MyState have confirmed that rates will increase from next week. 

Macquarie Bank has announced that, from 12 August, its variable rates will increase by 50 bps per annum. 

Further, the non-major bank has confirmed that from today (5 August), it will offer new and existing variable rate customers a discounted rate of up to 75 bps for fixed home loans. 

Macquarie’s transaction account interest rate and its ongoing savings account interest rate will also both increase to 2.25 per cent per annum on balances up to $250,000 from 12 August. 

MyState Bank has also revealed that from 15 August, its variable rate will rise by 50 bps for both new and existing customers. 

Commenting on the decision, MyState Bank managing director and CEO, Brett Morgan, commented that it is a challenging time for many Australians as the RBA makes efforts to address inflation. 

According to the Australian Bureau of Statistics, In the year to June, inflation rose to 6.1 per cent – the highest recorded annual inflation rate since the introduction of the goods and services tax.

The figure is tipped to peak at almost 8 per cent during the December quarter of this year. 

“While some customers are ahead on their mortgages, for others this will be the first time they’ve been faced with several months of increasing repayments,” Mr Morgan said. 

“Over the past month, our customer contact centre conversations are not just about interest rates, but also about cost of living pressures.

“For any customers concerned about their ability to meet upcoming loan repayments, we strongly encourage they get in contact with us as early as possible, as there are ways we can help out.”