Mortgage holders are bracing for higher repayments after another Reserve Bank hike, and the first two of the big four banks have moved to pass on the rate rise to their customers.
Macquarie Bank led the charge after Tuesday’s 25-basis-point rise, but on Wednesday, Westpac and NAB hit customers with the rate hike.
Westpac moved on Wednesday afternoon, about a day after the RBA’s decision. Getty
Westpac said on Wednesday afternoon that from November 13, home loan variable interest rates will rise by 0.25 percentage points.
Westpac consumer chief executive Carolyn McCann admitted the news would be difficult for mortgage holders to hear, with the rise being the fifth this year and taking the cash rate to its highest level in 18 years.
“We know another interest rate increase may be difficult for many households, particularly those who have already adjusted their budget this year,” she 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.”
For customers with savings accounts, the Westpac Life total variable rate with bonus interest will also rise by 0.25 percentage points to 5.50 per cent per annum, starting on November 13.
NAB announced it will increase its variable home loan interest rates by 0.25 percentage points from November 13 as well.
“We know another rate increase will be tough for some homeowners,” NAB personal banking group executive Ana Marinkovic said.
“For customers with a mortgage, these increases add up. We’re encouraging people to take a fresh look at their repayments and household budget.
NAB also passed on the rate hike to customers on Wednesday. AAP
“If things are getting tight, please don’t wait until you’re struggling to make a repayment. Talk to us early so we can understand your circumstances and look at how we can help.”
On Tuesday, Macquarie Bank became the first major lender to pass on the rate hike in full, moving shortly after the RBA’s decision.
It said variable home loan rates will rise by 0.25 percentage points from November 19.
Savers will also get the full increase, with the bank confirming its transaction and savings account rates will rise by the same amount on the same day.
Macquarie Bank became the first major lender to announce it will pass on the full RBA hike to borrowers. Supplied
Commonwealth Bank and ANZ have not announced when or how they would pass on the rate hike, as of Wednesday afternoon.
Macquarie has again chosen to increase both sides by the full 0.25 percentage points, continuing an approach it has taken after several RBA decisions this year.
Head of personal banking Ben Perham acknowledged the latest increase would be difficult for households already dealing with higher living costs.
“To help our variable home loan customers prepare, we’re again waiting more than two weeks before this latest increase takes effect,” he said.
Michele Bullock speaking at her post-meeting press conference on Tuesday.
9News
“At the same time, our transaction and savings account customers will see their variable rates increase, with no monthly fees or complex ‘hoops or catches’ to navigate.”
The Reserve Bank lifted the cash rate by 25 basis points to 4.85 per cent on Tuesday, its highest level since December 2008.
The board voted 6-3 for the increase.
Governor Michele Bullock declined to rule further moves in or out, saying the board would “take stock” as previous increases continue to work through the economy.
She also said the RBA’s central forecast does not have Australia falling into recession, although economic growth is expected to slow significantly and households will feel even poorer.