Three of the big four banks have passed on the Reserve Bank of Australia’s full August interest rate rise of 0.5 per cent.
CBA, NAB and ANZ have all increased their variable mortgage rates by that figure, while Westpac will wait until next Thursday to raise its interest rates.
Standard variable rates will now be as high as 6.3 per cent at CBA, with ANZ currently the lowest at 6.14 per cent across the majors.
While variable customers will be charged the higher interest rate from today, it will take several weeks before repayments rise.
“Variable borrowers’ rates might be rising today, but their monthly repayments aren’t likely to move for at least another few weeks” Ms Tindall said.
“That’s because banks typically give borrowers at least 20 days notice before increasing their monthly repayments.
“This lag gives borrowers time to prepare for higher repayments, but it could also catch some people out.”
Ms Tindall said borrowers should seek claification on when they will be required to pay higher interest rates.
“If you’re on a variable rate, find out what your new monthly repayment will be but also what date it starts,” she said.
“Make sure you’ll have enough money in your account to clear these higher repayments.
“If you don’t think you’ll have enough money, call your bank before it’s due to avoid a black mark against your name.”
After a series of rate hikes, borrowers are starting to feel the pinch according to Ms Tindall.
“This is the fourth rate hike in as many months,” she said.
“While most borrowers have been weathering the storm until now, it could be crunch time for some households who aren’t prepared for yet another increase.”
While mortgage rates are on the rise, savers are again not feeling the full benefit of higher interest rates.
Australia’s largest bank, CBA, increased the ongoing rate on the NetBank Saver by 0.5 per cent, however they only increased rates on the popular GoalSaver and Youthsaver accounts, by 0.25 per cent.
NAB has increased all its savings rates by the full 0.5 per cent, while ANZ has left millions of its savers in the cold by only increasing the rate on its new ANZ Plus Save account.
Westpac has announced it will increase most of its savings accounts by between 0.50 and 0.55 per cent next Thursday.
Ms Tindall said the gap between the lowest and the highest savings rates was getting wider each month.
“Your bank might have done right by you this month by passing on the full 0.50 percentage point hike, but what ultimately matters is your interest rate and whether you’re meeting your bank’s terms and conditions to qualify,” she said.
“If you want to do right by your nest egg, look for an account that’s above the cash rate at an absolute minimum.
“Keen savers should now be able to get ongoing rates well above 2 per cent.
“In fact, you can even get above 3 per cent, but you’ll have to jump through hoops to qualify.”
Ms Tindall said banks were slowly starting to make higher interest rates available to savers.
“For years decent savings rates have come with reems of fine print, but this is changing,” she said.
“ANZ might have failed to pass on the hike to its two main savings accounts, however, it has increased its new Plus Save account to an ongoing rate of 2.50 per cent with absolutely no strings attached.
“Macquarie Bank is also shaking things up by continuing to pass on full hikes to its transaction account.
“Macquarie customers can now earn 2.25 per cent on every spare dollar in their bank account, without any tricky fine print.
“That’s a breath of fresh air for people who hate having to shuffle money back and forth.”