Non-majors lift mortgage and savings rates

Following the Reserve Bank of Australia’s decision to increase the cash rate by its greatest amount in over 20 years this week, and moves from all four major banks to pass on the 50-bp increase to both new and existing mortgage borrowers, several more lenders have confirmed they will be raising both mortgage and savings rates. 

ING, Macquarie, Bendigo and Adelaide Bank, AMP and Suncorp all confirmed that they will be raising variable rates by the full amount.

ING’s changes will be effective from Wednesday, 15 June, while Bendigo and Adelaide Bank, Macquarie and Suncorp customers will notice the 50-bp increase from Friday, 17 June.

AMP Bank has said new customers will see its 50bp lift from next Friday (17 June) but existing customers will see rates rise from the following Monday (20 June).

Suncorp estimated that for every $100,000 of loan balance remaining on a 25-year variable loan, customers can expect their monthly repayments to increase by around $26.

However, many lenders are also taking the opportunity to revise savings interest rates or release special offers on term deposit accounts, with some making sizeable increases to attract savers.

For example, ING announced it would increase its highest ongoing variable savings interest rate by 0.75 per cent per annum, taking eligible Savings Maximiser customers up to 2.10 per cent per annum (p.a). 

The bank said there will also be rate increases across ING Australia’s Savings Accelerator offerings and increases across the bank’s personal term deposits (for new and renewing customers), including a 2.75 per cent per annum fixed personal term deposit rate for 12 months, effective 10 June. 

Similarly, Suncorp Bank said it would be introducing a new term deposit rate of 2.30 per cent per annum for 12 months, and increase the rate on its Growth Saver accounts by 0.70 per cent, from 15 June. Meanwhile, Bendigo and Adelaide Bank is increasing the interest rate on many of its deposit products including an increase to the rate on its Reward Saver account by 0.50 per cent.

AMP Bank will also increase interest rates on AMP SuperEdge Saver by 0.55 per cent and AMP Notice products  by 0.5 per cent effective 20 June 2022 and 14 June 2022 respectively. In addition, deposit account rates offered by AMP Bank to investment clients through AMP wealth platforms will increase by 0.50 per cent, effective from Tuesday (14 June).  

Tasmania-based lender MyState Bank also announced mortgage and saving rate increases this week, too.

Macquarie hikes savings rates to 1.50%

However, Macquarie Bank has outpaced the pack by announcing that it would increase interest rates on standard transaction account deposits from 1.00 per cent to 1.50 per cent (on balances up to $250,000) from 17 June.

According to the bank, this takes its savings rate to around 145 bps higher than the industry average for transaction accounts.

New Macquarie customers will also receive a “welcome rate” bonus, bringing the interest rate to 1.80 per cent p.a. on their first savings account for four months (on balances up to $250,000). 

Macquarie’s head of payments and deposits, Olivia McArdle, highlighted that the interest rate increase means that customers will earn the same interest rate on their transaction accounts as Macquarie’s ongoing, high-interest savings account rate. 

She said this would give customers “the confidence they are earning higher interest regardless of what account their money is in”, adding that bank’s digital account opening process meant customers could open an account quickly.

Ms McArdle said: “It’s time Australians earned interest on their everyday bank accounts. That's why we’re now applying the higher ongoing savings account interest rate to our transaction accounts. The concept of having to shuffle your money between separate online savings accounts just to earn competitive interest felt outdated and inefficient. We wanted to redesign the whole experience based around the needs of our customers… 

“We know that there are hundreds of billions of dollars sitting in everyday transaction accounts across Australia earning close to 0 per cent p.a. in interest. By comparison, Macquarie will pay 1.50 per cent p.a. on its transaction accounts and importantly, we won’t make customers jump through hoops to get the higher rate – there’s no charges, fees or deposit conditions.”

She continued that the bank also hoped to attract new customers with its speedy onboarding process: “We’ve also completely rethought and rebuilt the account opening experience and the feedback we’ve received from customers so far has been very positive. In as little as a minute, you can apply for an account, verify your identity, load your new debit card into your digital wallet and start saving or spending right away.”

[Related: Major banks pass on 50-bp rate hike]