All four major banks have passed on the full 50 basis point interest rate increase, while once again savers have missed out.
Westpac, CBA, NAB and ANZ have all increased their variable home loan rates on the back of the Reserve Bank of Australia (RBA) lifting the official cash rate to 2.35 per cent last week.
So far, 18 banks in total have announced variable mortgage rate rises.
Currently, the lowest variable interest rate from a major bank is 3.99 per cent with Westpac. However, this rate is only for two years, after which it increases by 0.40 per cent.
RateCity.com.au Research Director, Sally Tindall, said she wasn’t surprised the majors were quick to pass on higher interest rates.
“Unsurprisingly, all four big banks are hiking variable mortgage rates by the full 0.50 percentage points,” Ms Tindall said.
“As a result, existing customers with a $500,000 loan at the start of the hikes will soon be paying a total of $614 extra on their mortgage a month.
Ms Tindall said it typically took a few months for interest rate increases to flow through to borrowers.
“While these rate hikes will take, in some cases, over two months to hit your bank account, try to start making the higher repayments now,” she said.
“While money is already incredibly tight for many families, stashing any spare cash in the mortgage will help.
“Unfortunately for borrowers, the rate hikes aren’t stopping here.
“The RBA has said there will be more increases to come, however, we are expecting the size of the hikes will slow, potentially as soon as next month.”
Meanwhile, savers have once again come up short, with CBA and Westpac only announcing hikes for their bonus and kids savings accounts.
While NAB and ANZ have not announced any savings rate increases for their customers so far.
Even though CBA and Westpac have increased their bonus savers this month, none of the big four have passed on the full 2.25 percentage points of RBA hikes across May – September to their savings customers.
Ms Tindall said just because a bank has increased its interest rates for savers, doesn’t mean it will be competitive.
“CBA and Westpac might have passed on decent hikes to key savings accounts this time around, but that doesn’t automatically mean they are competitive rates,” she said.
“While NAB and ANZ have left their savers in the cold so far, peer pressure could force them to rethink their announcement.
“If your bank hasn’t yet announced a decent hike to your savings rate, now is the time to question this decision.
“A cracking savings rate after this latest round of hikes will be over 3.50 per cent. Anything below 2.50 per cent should be cause for concern.”