Banks pass on full RBA rate hike

On Tuesday (5 July) the Reserve Bank of Australia (RBA) announced at its monetary policy meeting it will increase the cash rate by 50 bps to 1.35 per cent.

Following the move, several lenders – including the four major banks – have already begun announcing rate changes to both home loans and savings rates.

ANZ, CBA, NAB to change rates from 15 July

The Commonwealth Bank of Australia was the first to move, announcing it will be passing on the 0.50 per cent change to both home loan variable interest rates and its GoalSaver and Youthsaver savings products from 15 July.

The standard variable rate for an owner-occupier principal and interest (P&I) mortgage will now be 5.80 per cent p.a, with investor P&I loans increasing to 6.38 per cent p.a.

Interest-only loans will increase to 6.29 per cent p.a and 6.64 per cent for owner-occupiers and investors, respectively.

CBA’s group executive, retail banking, Angus Sullivan said: “We understand the rapidly changing rate environment may raise questions for some of our customers and we are here to help them.”

He encouraged borrowers to utilise the bank’s tools to help them manage and track their repayments online or reach out to the bank’s financial assistance solutions team if they are “falling behind or think they may fall behind with home loan repayments”.

ANZ is also passing on the full rate to all variable interest home loan rates in Australia from next Friday (15 July).

This will take ANZ’s new index rate to 5.64 per cent.

It will reportedly increase monthly repayments by $119 on an average home loan of $450,000 for an owner-occupier paying principal and interest.

ANZ will also increase the bonus interest rate on Progress Saver accounts by 50 bps and increase the interest rate on ANZ Plus accounts by the same amount – taking it to 2.00 per cent p.a.

The bank said that in making its decision, it considered various factors including the change in the official cash rate, the impact on customers, business performance and competition. 

Maile Carnegie, ANZ’s group executive, Australia retail, noted that as the cost of living has risen, some customers “may be looking for support while they reconsider their household budgets”.

She highlighted that ANZ customers could use the bank’s new repayment calculator to see how this change would impact them and utilise a free home loan check-in that can help borrowers “reorganise their loan so it continues to meet their needs”. 

Similarly, National Australia Bank (NAB) is increasing its standard variable home loan interest rate, Reward Saver account and 12-month term deposit account from 15 July 2022.

NAB’s new standard variable rates for owner-occupiers will be 5.77 per cent from next Friday (15 July).

Rachel Slade, NAB’s group executive, personal banking, commented that “overall, [NAB] customers are in a good position with many ahead on their repayments”.

However, she added that any customers who are interested in understanding what the increasing interest rate environment means for their home loan, or concerned about their financial situation, should reach out to the bank for support throughout the rapidly changing rate environment or utilise online resources.

Westpac to move on 20 July

Westpac is also passing on the full rate to home loan and deposit customers, but not until Wednesday, 20 July. 

From 20 July, Westpac will increase home loan variable interest rates by 50 bps p.a. for new and existing customers. This will take its standard variable rate for owner-occupiers to 5.73 per cent. 

Westpac will also increase the standard variable base rate for Westpac Life savings customers to 1.35 per cent p.a. 

Customers will be able to access a new term deposit offer of 2.50 per cent p.a. for terms between 12 and 23 months from 8 July. 

Chris de Bruin, Westpac’s chief executive, consumer and business banking, said: “We considered several factors in making this decision including the 0.50 per cent rise in the official cash rate and ongoing increases in the cost of funding, as well as the needs of both borrowers and depositors.

“We know that some customers will be reassessing their household budgets as home loan interest rates rise. While the majority of our home loan customers are ahead on repayments and in a good position to adapt to interest rate changes, some may find it more challenging.” 

Mr de Bruin highlighted that the bank has a “dedicated team to assist customers potentially facing financial difficulty, who provide personalised support including giving customers more time to get their finances back on track”.

Macquarie lifting on 14 July

Non-majors were also passing on the full 50-bp rise.

Macquarie Bank will be increasing variable home loan interest rates by 0.50 per cent p.a. from Thursday, 14 July 2022.

Its transaction account interest rate will increase to 1.75 per cent p.a. on balances up to $250,000 (following Macquarie’s decision in June to increase the interest rate customers earn on their transaction account to be the same as its ongoing high-interest savings account). 

Macquarie’s ongoing savings account interest rate will also increase to 1.75 per cent p.a. on balances up to $250,000. Both new ongoing interest rates will be effective on 14 July 2022.

Macquarie’s six-month term deposit interest rate will increase to 2.40 per cent and one-year term deposit interest rate will increase to 3.25 per cent, both for balances up to $1 million. These changes will be effective on 6 July 2022.

Suncorp to move on 15 July

Suncorp Bank will change its mortgage variable interest rates on 15 July.

Suncorp Back to Basics variable interest rate and standard variable interest rate will increase by 0.50 per cent p.a. 

According to the bank, based on this rate change, 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. 

It will raise the Suncorp Growth Saver account interest rate by 0.70 per cent to 2 per cent p.a. and its 18-month carded term deposit by 55 bps to 3 per cent p.a. 

Suncorp Bank CEO Clive van Horen said: “The decision to raise our home and business loan interest rates has not been made lightly, particularly given the rising cost of living which is impacting Australians.

“We understand this increase will put pressure on people’s pockets and we are here to assist customers with tailored solutions to help them navigate this rate change.

“Suncorp continues to prioritise offering competitive interest rates, as well as deposit accounts which empower our customers to maximise their savings potential.”

MyState moving on 18 July

From Monday, 18 July, MyState Bank will lift both savings and variable home loan interest rates by 50 bps for both new and existing customers.

The maximum monthly interest paid on the Bonus Saver account will therefore rise to 2.1 per cent  (once eligibility requirements have been met).  

MyState Bank managing director and CEO, Brett Morgan, said this was a “challenging time” for many Australians, with the bank taking into account the needs of both deposit and lending customers. 

Mr Morgan said while this latest increase in the cash rate was widely anticipated, home loan customers will understandably be concerned about the impact on household budgets. 

“Over the past month our customer care team has been taking calls around how much new mortgage repayments will be as customers look to prepare for the months ahead,” he said, adding that tools were available online to help borrowers navigate changing repayments.

[Related: Lowe slams another 50-bp cash rate on Australians]