All of Australia’s Big Four banks– Commonwealth Bank, Westpac, ANZ, and NAB– announced that they would pass on the Reserve Bank of Australia’s latest rate hike to their customers. As a result, they have increased their respective standard variable home loan rates by a quarter-point.
This decision comes after the surprising move by the RBA earlier this week when it raised its cash rate by 25 basis points to 4.1%. The central bank also expressed concerns about needing “some further tightening” to ensure inflation returns to its target range within a “reasonable timeframe.”
This latest rate hike by the RBA signifies the 12th rate increase since May of the previous year. It brings the cash rate to its highest level in the past 11 years. For the last year, mortgage owners have experienced a significant 400 basis point increase, marking it the fastest tightening cycle on record. This tightening cycle has been prompted by persistent high inflation, which has posed economic challenges.
Big Four Rate Hikes
Westpac took the lead in implementing the rate hike for its customers. Effective June 20, new and existing customers will experience a 0.25% increase in their home loan variable interest rates. Additionally, starting from June 9, specific customers will have the opportunity to benefit from a new particular term deposit offer, which offers an interest rate of 4.50% for a duration of 12 to 23 months.
ANZ has announced that starting from June 16, variable interest rates for its Australian home loans will be raised by 0.25% per annum. Alongside this adjustment, ANZ also introduced a new 12-month Advance Notice term deposit rate of 4.60% per annum, effective Friday. Additionally, the bank has stated that it will continue to review other deposit rates for potential changes in the future.
Shortly after ANZ’s announcement, Commonwealth Bank also revealed its decision to increase rates. From June 16, Commonwealth Bank will raise its home loan variable and savings interest rates by 0.25% per annum. This rate adjustment will apply to various accounts, including Youthsaver, GoalSaver, and the introductory rate of the NetBank Saver account.
NAB was the last to declare an interest rate increase. Effective June 16, NAB will raise its standard variable home loan interest rate by 0.25% annually. In addition, the bank has announced a 0.25% per annum increase in the Reward Saver bonus interest rate. Furthermore, NAB’s 12-month Term Deposit will experience a more significant increase of 0.40%.
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