Variable rate customers who have their mortgage with Westpac and some of their subsidiaries will be forking out an average of $35 extra per month and $420 per year, after the bank hiked rates by 14 basis points.
Westpac has become the first of the big four banks to hike out-of-cycle with the RBA, after sustained cost of funding pressures.
“Westpac has today asked their variable rate home loan customers to help ease their cost of funding pressures.
“While banks are entitled to make a profit, some Westpac home loan customers will be disappointed with the bank’s decision to increase their interest rate.
Westpac rate hike impact
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“Most households will be able to absorb the rate hike; however, anyone who overstretched to get in the market will feel burdened by this extra cost.
“Now that Westpac has hiked, taking the brunt of the bad PR, we expect the other three banks to follow suit.
“If your lender hikes your interest rate, it’s the perfect time to start considering your options.
“Ironically, the banks are desperately seeking out customers to boost their lagging profit margins. They’re doing this by offering rock bottom rates, but only to new customers; so if you’ve got a bit of equity in your home, now is a great time to consider refinancing,” Ms Tindall said.