Australia’s banks have begun raising interest rates on home loan and savings after the RBA’s latest rate increase.
The Reserve Bank of Australia’s (RBA) November monetary policy meeting resulted in the official cash rate being increased to its highest level in 12 years, to 4.35 per cent, and lenders have wasted no time passing the increase onto customers.
All four major banks announced increased interest rates within 48 hours of the RBA’s decision.
Variable rates across ANZ, NAB’s, Westpac’s the Commonwealth Bank of Australia’s (CBA) home loan products and savings rates will increase by 0.25 per cent per annum (p.a.).
The lifted rates for ANZ, NAB and CBA customers will come into effect as of 17 November 2023, while Westpac’s rates will increase for new and existing customers as of 21 November 2023.
ANZ customers will see monthly repayments increase by $70 on a variable home loan of $450,000 for an owner-occupier paying principal and interest.
ANZ group executive Australia retail Malie Carnegie acknowledged that the rate changes will “impact customers and their household budgets differently”.
“Over the past 18 months, we’ve been proactively reaching out to thousands of home loan customers each month, to check in with them about their circumstances and loan arrangements,” Ms Carnegie said.
Westpac chief executive, consumer Jason Yetton said the major bank considers a “range of factors and work to balance the needs of both borrowers and depositors”.
“We know people are feeling the impact of the higher cost of living and adjusting their spending to manage their household budget,” Mr Yetton said.
“While customers are cutting back in response to rising expenses, our overall hardship numbers remain low and more than 70 per cent of customers are ahead on their mortgage repayments.”
NAB group executive for personal banking Rachel Slade has encouraged customers to reach out to the bank as soon as possible over concerns about their finances.
“While most of our customers are in good shape, there may be some people who are more concerned about the first rate rise since mid-year which is why it’s crucial to reach out to your bank as soon as you can. We’re here to help,” Ms Slade said.
CBA group executive retail banking Angus Sullivan said: “We know Australians are facing increasing cost of living pressures and for some households this is more difficult than for others. Customers who are struggling are top of mind for us and helping customers when they need it is our priority.”
Meanwhile, non-major banks Macquarie Bank and Bank of Queensland (BOQ) have also announced an increase of 0.25 per cent p.a. to their variable home loan rates, effective from 17 November and 10 November 2023, respectively.
Additionally, AMP Bank has announced that reference rates for variable rate home loans will increase by 0.25 per cent p.a. effective 10 November 2023 for new customers and 13 November 2023 for existing customers.
ING have also increased all variable home loan rates for new and existing customers by 0.25 per cent p.a. effective from 14 November 2023.
More pressure on borrowers
Following the RBA’s decision to raise the cash rate, federal Treasurer Jim Chalmers expressed his concern, stating that the latest hike will “make life harder for people who are already doing it tough”.
“This is a difficult day for people with a mortgage,” Mr Chalmers said.
“The independent Reserve Bank has taken this decision today (7 November) in the interest of this fight against inflation and what we are doing as a government and what the Reserve Bank is doing as an independent board is all about trying to make sure that we can get on top of this inflation challenge in our economy, which is hurting our people and our economy more broadly.”
