Westpac has become the latest of the big four banks to increase fixed rates as households brace for further mortgage pain. <\/p>\n
On Thursday, Westpac lifted its fixed rate offering for the second time in three weeks as the bank prepares for further rate hikes.<\/p>\n
Thursday\u2019s hike was 0.15 per cent across each of its one, two, three, four and five-year offerings. <\/p>\n
As a result, Westpac\u2019s fixed interest rates now start from 6.29 per cent, available on its two-year offering. <\/p>\n
Overall, Westpac has lifted interest rates up by 45 basis points in just the last three weeks.<\/p>\n
Even with the two interest rate hikes in three weeks, Westpac\u2019s fixed rates remain the cheapest of the major four banks. <\/p>\n
Canstar data insights director Sally Tindall says Westpac\u2019s interest rate hike isn\u2019t an isolated event.<\/p>\n
\u201cPlenty of banks are heading back to the pricing drawing board, some for the second time in a matter of weeks, as a result of growing concern Australia\u2019s inflation rate is about to spike once again,\u201d she said.<\/p>\n
\u201cOur analysis shows more than 90 per cent of lenders have moved fixed rates since the last RBA decision, including all four big banks, with both Westpac and NAB having two stabs at it in this time.\u201d<\/p>\n
According to Canstar, just 19 lenders are offering at least one fixed rate under 6 per cent.<\/p>\n
This time last year there were 83.<\/p>\n
\u201cFor borrowers, this swift repricing is a clear signal \u2013 opportunities to lock in a more competitive fixed rate are slipping away,\u201d Ms Tindall said.<\/p>\n
Interest rates set to rise<\/p>\n
Westpac is lifting its fixed rate offerings to customers as it predicts further interest rate pain for households.<\/p>\n
In a previously released forecast, Westpac predicted there would be three more interest rate hikes in 2026, with the central bank set to lift rates in May.<\/p>\n
Westpac chief economist Luci Ellis says the Middle East conflict is flowing through to fuel prices, which will eventually lift the broader inflation rate. <\/p>\n
\u201cWe now expect the RBA to hike in June and August as well as May,\u201d Ms Ellis previously said. <\/p>\n
Australia\u2019s inflation rate has re-accelerated lately as the US\/Israel and Iran war, which started at the end of February, led to the blockage of a critical waterway known as the Strait of Hormuz.<\/p>\n
About 20 per cent of the world\u2019s oil flowed through this region before the conflict. <\/p>\n
Since the war, the price of oil has nearly doubled from $US56 ($A80) a barrel to about $US100 ($A143) a barrel.<\/p>\n
For every $10 increase in the price of oil, Australians pay an extra 10 cents at the fuel pump.<\/p>\n
Ms Ellis said the change reflected assumptions that fuel supply disruptions would last longer than previously thought, with the Strait of Hormuz effectively closed for about eight weeks and shipping traffic recovering gradually.<\/p>\n
\u201cIt also reflects the surprisingly rapid pass-through of higher fuel and other oil\u2011derived product prices into other prices in Australia,\u201d she said. \u201cWe believe the RBA will respond to this pricing behaviour by tightening monetary policy by more than would have been needed absent that pass\u2011through.\u201d<\/p>\n
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