Westpac raised its variable interest rates for home loans for the second time in the space of a month.
On Wednesday, Westpac mortgage rates for new and existing customers rose 0.50 percentage points.
It comes after raising variable interest rates on home loans by the same amount for new and existing customers on June 21.
Australia’s second-largest property lender also raised fixed rates by up to 0.60 percentage points for homeowners and investors on all fixed rate terms.
One-to-three-year rates for homeowners paying principal and interest on their loan rose 0.50 percentage points, while the rate rose 0.60 percentage points for four-year rates. at five years old.
This is the second time in the space of a month that Westpac has made changes after increasing variable interest rates on home loans by 0.50 percentage points for new and existing customers on June 21.
RateCity research director Sally Tindall said fixed mortgage rates starting with five or six were the “new normal” for the big four banks.
She also said “ultra-low” interest rates of less than 2% were “just a thing of the past”.
“It’s hard to believe that just a year ago Westpac was offering a 2-year fixed rate of 1.89% to homeowners. Now that rate has almost tripled, to 5.39 per cent,” Ms Tindall said.
Westpac’s managing director, Consumer and Business Banking, Chris de Bruin, said the bank understands some customers may find these changes “difficult”.
“We considered several factors in making this decision, including the 0.50% rise in the official exchange rate and the continued increases in the cost of funding as well as the needs of borrowers and depositors,” he said. declared.
“We know that some customers will reassess their household budget as home loan interest rates rise.
“While the majority of our home loan customers are ahead of repayments and in a good position to adjust to changes in interest rates, some may find it more difficult.”
Despite the hikes, Westpac’s rates are still the lowest among the big four banks.
The bank will also increase the standard variable base rate for Westpac Life savings customers by 0.50 percentage points from July 22, bringing the total variable interest rate to 1.35% per annum.
It comes as ANZ warned that Australian borrowers face four more massive rate hikes over the next four months, which will take the official cash rate above 3% before Christmas.
“We expect the RBA to achieve this via four more successive rate hikes of 50 basis points in August, September, October and November,” ANZ Australian Economics Director David Plank wrote on Tuesday. .
“This additional tightening of 200 basis points brings the cash rate target to 3.35% by November.”
Reserve Bank of Australia Governor Philip Lowe confirmed that interest rates would continue to rise.
“We are going through a process of steadily increasing interest rates and there is more to come,” he said on Wednesday.
“We need to get away from these very low interest rates that we had during the emergency,” he said.
The RBA raised the cash rate to 1.35% earlier this month.
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