Big Four banks quick to pass on interest rate rise

Well, that didn’t take long.

Just a few hours after the Reserve Bank of Australia (RBA) lifted the cash rate 25 basis points to 3.10 per cent at its final meeting for 2022, all four big banks announced they would pass the hike on in full.

It means Westpac will have the best basic variable loan at 4.74 per cent, but only for two years, at which time it will jump to 5.14 per cent.

NAB has the highest basic variable rate at 4.99 per cent.

Standard variable rates are about  seven per cent for all big four banks, with CBA the highest at 7.55 per cent. Research Director Sally Tindall said some homeowners may need to send out an SOS as a result of the latest rate increase.

“Borrowers on the blunt end of this rate hike will be bracing for more rate pain when this latest increase hits their bank accounts,” she said.

“While some homeowners will be able to take this eighth rate hike on the chin, others will be wondering where on earth the money will come from.

“If you don’t know how the budget is going to add up, send out an SOS as soon as you can.

“The earlier you put your hand up for help, the more options you’re likely to have.”

Savers have fared a little better with CBA announcing rate rises for all of its key savings accounts which, in the majority of cases, are higher than the RBA’s 0.25 per cent hike.

Ms Tindall said the CBA had gone “above and beyond” in lifting each of its key savings accounts.

“It’s fantastic to see Australia’s biggest bank leading the way with regards to savings hikes, because it will force others to follow in its footsteps,” she said.

“Currently, the highest ongoing savings rate for all adults is 4.30 per cent, however, this could lift to over 4.50 per cent, if the market leaders pass on full hikes.

Westpac has announced rate rises for two of its savings accounts but ANZ and NAB customers have been left in the cold.

“While Westpac is increasing its Life and Spend&Save accounts, existing customers with an eSaver account have missed out, at this stage,” Ms Tindall said.

“Westpac eSaver customers are still only earning an ongoing rate of 0.85 per cent, which is laughable considering the cash rate has just hit 3.10 per cent.

“Westpac eSaver customers should consider making the switch to earn more than just peanuts on their nest egg.

“Frustratingly, NAB and ANZ have managed to announce hikes for their borrowers but not for their savers, opting to sit back and see what other banks do before making a decision.

“NAB and ANZ savings customers should put pressure on their bank to pass on this rate hike in full by sending them a tweet, an email or by picking up the phone. The more customers that make a fuss, the more likely these banks are to make the right decision for their savers.”

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Kylie Dulhunty

Kylie Dulhunty is the Deputy Editor at Elite Agent.

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