Interest rates: Westpac increases fixed rate mortgages after RBA decision
Westpac announced significant increases in its interest rates for fixed rate home loans and home loans.
Effective Tuesday, the Big Four banks raised rates on all of its fixed-rate home loans by 50 basis points for homeowners and investors.
New and existing customers were affected by the change, with the fixed rate on a one-year homeowner loan dropping from 4.69% to 5.19%.
Chris de Bruin, managing director of consumer and business banking at Westpac, said they knew the hikes would be difficult for some customers.
“We understand that many Australians are carefully managing their household budgets at this time and we are here to support our clients through the changing interest rate cycle,” he said during the interview. announced changes last week.
“When we look at our interest rates, we look to balance the needs of multiple stakeholders, including home loan and deposit customers.
“We also take into account several factors, including the increase in the cash rate, the competitive environment and the performance of our business.”
But as home loan customers have been impacted by the changes, Westpac has made a move to help savers.
The total Westpac Life variable rate with bonus interest increased by 0.50 per annum to 2.35%, while the total Westpac Bump Savings variable rate with bonus interest also increased to 2.35% per annum.
Rate City research director Sally Tindall said Westpac’s move could lead to other big banks revealing what they were doing for deposit customers.
“There will now be pressure on NAB and ANZ to step up after notably excluding savers from their RBA announcements on Friday,” she said.
“Westpac customers with Life and Bump accounts will see decent increases this month; however, those with eSaver accounts still only earn a rolling rate of 0.85%, which is 1.5 percentage points below the cash rate and 2.75 percentage points behind the market leader.
The increases come after the Reserve Bank of Australia (RBA) decided to raise the exchange rate by 0.50% at the September board meeting.
Mozo personal finance expert Claire Frawley said lenders are becoming increasingly “unpredictable” with their rate movements.
“While we’ve seen variable rates rise after all the RBA rate hikes, fixed rates have been more unpredictable with some lenders exiting the cycle,” she said.
“In August, we saw 29 lenders cut some or all of their fixed rates, including two of the big four banks. Commonwealth Bank cut its 4-year fixed rates by 160 basis points and Westpac its four-year rates by 100 basis points.