Three of the big four banks have now lifted their variable interest rates on home loans following the RBA board’s decision to lift the official cash rate on Tuesday.
On Thursday afternoon, Westpac joined ANZ and CBA in mirroring the RBA’s 50-basis point hike by passing that same increase onto its customers.
ANZ will increase all variable interest rate indexes for its Australian home loans by 0.50% from August 12.
The bank said to help its savings customers, ANZ would increase the rate on ANZ Plus Save account balances of less than $250,000 by 0.50%. to 2.50% p.a. For customers who preferred the certainty of a higher fixed return, including retirees who rely on interest to help fund their livelihoods, ANZ said it would offer a new 11-month advance notice term deposit rate of 3.00%, effective August 8.
ANZ group executive - Australia retail Maile Carnegie (pictured above left) said ANZ realised the persistent low-rate environment of recent years had been challenging for savings customers.
“This is why today we have tried to provide some relief for them with a range of deposit rate increases,” Carnegie said.
“For our home loan customers, we know the cost-of-living pressures will impact some of them 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.”
Read more: RBA raises interest rates for the fourth time
Carnegie said ANZ’s experienced customer support teams were also available to help customers with any difficulties.
“We encourage these customers to get in touch with us as soon as they can,” Carnegie said.
“We consider several factors in making these decisions, including the impact on customers, the change in the official cash rate, business performance and competitive pressures.”
The 0.50% change will increase monthly repayments by $121 on an average home loan of $450,000 for an owner-occupier paying principal and interest.
Customers will be able to see their new interest rates on the ANZ app or internet banking from the effective dates.
Shortly after ANZ made its move, Westpac announced it would increase its home loan variable interest rate by 0.50% for new and existing customers, effective August 18.
The bank will also offer a special four-year fixed rate of 4.99%. for owner-occupied customers on principal and interest repayments with the premier advantage package, effective August 9.
“With every interest rate change, we consider multiple factors and stakeholders, including homeowners and savers,” said Westpac chief executive, consumer and business banking Chris de Bruin (pictured above right).
“We also take into account the change to the cash rate and other increases to the cost of funding our loans.”
De Bruin said Westpac understands the change in home loan interest rates would mean many customers would be reviewing their budgets.
“While more than two thirds of customers are ahead on repayments, we recognise after several successive interest rate rises, some may be feeling more financial pressure. We’re here to support these customers and encourage them to give us a call,” he said.
“We’re also putting a competitive fixed rate offer on the table to help give our customers more options as interest rates rise. 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.”
De Bruin said over the past few months, Westpac continued to increase its rates for savers across a range of products.
“Following the latest cash rate change, we will lift interest rates again on two of our most popular accounts, Westpac Life and eSaver, which will boost the returns on savings for many of our customers.”
Westpac will implement the following updates for its deposit customers:
Westpac Life total variable rate with bonus interest will increase by 0.50% to 1.85%, effective August 18.
Under Westpac’s Spend & Save offer for 18-29 year olds, eligible customers can earn a total variable rate of 3.25% which is an increase of 0.50%, effective August 18.
Westpac eSaver standard variable rate will increase by 0.55% to 0.85% for new and existing customers. The five-month total introductory variable rate for new eSaver customers will increase to 1.80%, effective August 18.
Customers will be able to access a new term deposit offer of 3.00% for 12 to 23 months, effective August 8.
Read more: CBA lifts variable interest rates
On Thursday morning, CBA was the first of the big four banks to announce it would increase its home loan variable interest rates by 0.50%, along with increasing the interest rates on select savings products by 50 basis points.