Big banks move on upped 3.35% cash rate

The first big banks have started to pass on increased interest rates to their customers, following the Reserve Bank of Australia (RBA)’s 25-bp cash rate increase on Tuesday (7 February).

The increase had been as all the major banks had expected prior to the call, at the minimum.

Australia and New Zealand (ANZ) banking group has announced it will increase interest rates for its variable home loan and some savings customers. 

It has been confirmed that variable interest rates across ANZ’s Australian home loans will increase by 0.25 per cent per annum (pa), effective 17 February 2023.

The major bank will also increase the rate available to savings customers on the ANZ Plus Save account for balances less than $250,000 by 0.25 per cent pa to 4.00 per cent pa, effective 14 February 2023, it has said.

Last week, ANZ increased the rate available on its new 12-month Advance Notice term deposit to 4.10 per cent pa, but the bank will continue to review other deposit rates, it assessed

ANZ group executive Australia retail, Ms Maile Carnegie, said: “At a time of increased cost of living and rate changes, some customers will be feeling greater financial pressure.

“We urge anyone facing difficulties to speak with our expert teams to discuss the options available to support them and their specific circumstances as early as possible.”

According to ANZ, the 0.25 per cent per annum change to variable home loan interest rates will increase monthly repayments by $66 on a variable home loan of $450,000 for an owner-occupier paying principal and interest.

The bank has explained that it “considers a range of factors in making these decisions” including the impact on customers, the change in the official cash rate, business performance, and competitive pressures.

CBA announces rate change

Commonwealth Bank Australia (CBA) has responded to February’s cash rate decision on Thursday (9 February).

Effective 17 February, CBA will lift its home loan variable interest rates by 0.25 per cent p.a.

CBA group executive, retail banking, Angus Sullivan said: “Customers who have questions about the changing interest rate environment and how it may impact them, including those who might be on a fixed rate home loan, are encouraged to contact CommBank.”

“We want any customer who would like to talk about their individual situation to message us in the CommBank app to explore different support options with one of our specialists.

“Starting that conversation early can help alleviate concerns and allow us to work together to find solutions,” Mr Sullivan said.

In addition, the bank will increase the interest rates across a number of its savings products, by up to 0.75 per cent p.a.

This includes its GoalSaver with bonus interest rate increasing by 0.75 per cent p.a. to 4.00 per cent p.a., comprising the standard variable rate of 0.25 per cent p.a. and the bonus variable rate of 3.75 per cent p.a., effective 10 February.

Its Youthsaver with bonus interest rate will increase by 0.50 per cent p.a. to 4.00 per cent p.a., comprising the standard variable rate of 1.60 per cent p.a. and the bonus variable rate of 2.40 per cent p.a., effective 10 February.

The major bank explained that to “further support savers”, CBA will extend the availability of its 12-month Term Deposit special of 4.00 per cent p.a.

Some Australians will find this challenging

Likewise, the National Australia Bank (NAB) had confirmed on 7 February its standard variable NAB home loan interest rate will increase by 0.25 per cent per annum (pa), effective from 17 February 2023.

The major bank’s savings and term deposit rates are continually under review, it has said, while adding that it has made “more than 50 increases across savings products in the past nine months”.

NAB group executive for personal banking, Rachel Slade, commented: “We acknowledge the RBA’s actions to bring inflation under control by increasing the cash rate, but recognise that there are some Australians who will find this challenging.

“I encourage anyone who is worried about their situation to reach out to their bank.

“What we do know is that people are more engaged with their finances than they’ve been in a long time and that they are making their own adjustments to spend more ‘thoughtfully’ on non-essential purchases.

“At NAB, we have a dedicated team who take the time to listen to each customer’s individual situation and are able to offer tailored solutions — whether that’s reduced payment arrangements, payment breaks or restructuring their loan.

“When a customer gets in touch with NAB Assist at the early stages of their concerns about their finances, we’re able to get more than 95 per cent back on their feet financially within three months.”

Implementation from Westpac

On Thursday (9 February) Westpac announced a range of interest rate changes for home loan and deposit customers, effective 21 February.

For home loan customers, its home loan variable interest rates will increase by 0.25 per cent p.a. for new and existing customers.

For deposit customers, Westpac Life total variable rate with bonus interest will increase by 0.25 per cent p.a. to 4.00 per cent p.a.

Its Westpac eSaver total variable rate will increase by 0.25 per cent p.a. to 4.00 per cent p.a. for new customers for the first five months.

This is in addition to a current 12-month Term Deposit offer of up to 4.10 per cent p.a. available for Westpac customers that open or renew online, the major bank explained.

“Today we’ve announced interest rate increases to our Westpac Life and eSaver accounts to support customers as they think about their financial goals in the year ahead,” said Chris de Bruin, Westpac chief executive of Consumer and Business Banking.

“We know at this time of year some customers are reassessing their household budgets and looking for ways to manage their money.

“We have a number of tools available in the Westpac app to help customers track their spending and manage their finances.

“While the majority of our customers continue to be well-placed to navigate the rising rate environment, we know some might be feeling uneasy amid growing cost of living pressures.

“If customers are concerned, we encourage them to give us a call.

“The sooner they get in touch the better placed we are to provide support,” said Mr de Bruin.

[Related: February cash rate hike continues mortgage pain]