Major Australian banks to pass full RBA rate hike to borrowers
Macquarie, Westpac, NAB and Commonwealth Bank will apply the Reserve Bank of Australia's latest 25-basis-point cash-rate increase to variable home-loan customers from 13 November.
Macquarie was the first of four major Australian lenders to announce that it will pass on the Reserve Bank of Australia's (RBA) latest cash-rate rise to variable mortgage borrowers, with Westpac, National Australia Bank (NAB) and Commonwealth Bank following suit. The banks said the changes will take effect on Friday, 13 November, giving borrowers only a few days to adjust their budgets.
The RBA lifted the cash rate by 0.25 percentage points on Tuesday, bringing it to 4.85 percent – the highest level since December 2008 and the fifth increase this year. A homeowner with a $500,000 loan can expect an additional $77 per month, while a $1 million loan would see repayments rise by about $153 per month.
"We know another interest rate increase may be difficult for many households, particularly those who have already adjusted their budget this year," Westpac consumer chief executive Carolyn McCann said. "The majority of our customers are managing well and remain ahead on their repayments. For customers who are feeling the pressure, we encourage them to reach out to us early so we discuss the support options available."
ANZ had not confirmed whether it would pass on the increase as of Wednesday afternoon. RBA Governor Michele Bullock noted that the board would "take stock" of future moves and said forecasts did not indicate an imminent recession, though growth was expected to slow and households would feel poorer.
While borrowers face higher loan costs, savers see limited benefit. Westpac announced a higher maximum ongoing rate of 6.20 percent on its Spend&Save account for eligible customers aged 18 to 40, and a 5.50 percent rate on its Life bonus saver account, though base rates remain unchanged. NAB and Westpac have not disclosed further changes to other savings products.
Canstar data insights director Sally Tindall warned that the timing of the changes could be challenging for mortgage customers, noting that the banks' announcements confirm the expected pass-through of the rate hike.