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Westpac announces home loan rate hike: Who’s next?

Posted: 29 August 2018 4:23 pm

money handThe bank has become the first of the major banks to lift variable rates.

Westpac has announced it will raise variable rates for both owner-occupiers and investors by 0.14%. The increase will take effect from 19 September and will impact both new and existing customers.

The Reserve Bank hasn't moved the cash rate in over a year, but lenders big and small have been raising and lowering rates all over the place. This is the first rate hike from one of the Big Four.

Chief executive of Westpac's consumer bank George Frazis said the "tough decision" came down to funding costs, which he claimed had increased by 0.25% between February and March.

"We initially hoped that this increase would be temporary, and therefore we have incurred these costs over the last six months. The rate changes announced today will not recover these costs," Frazis said.

Frazis said the bank believes funding costs will remain elevated "for the foreseeable future".

"Given the step change in our funding costs, we have made what we believe is the appropriate decision: to balance the interests of all of our stakeholders by remaining both unquestionably strong and competitive in the market," Frazis said.

The rise will take Westpac's standard variable rate to 5.38%, currently the highest among the major banks.

LoanInterest rate (p.a.)
ANZ Standard Variable Home Loan4.39% p.a.
CBA Standard Variable Home Loan (Owner Occupier P&I)4.55% p.a.
NAB Tailored Home Loan Variable Rate (Owner Occupier P&I)4.52% p.a.
Westpac Rocket Repay Home Loan - Principal and Interest5.38% p.a. (from 19 September)

In spite of the rise, good home loan deals still abound. The Big Four have their own special offers with much lower rates:

Across the wider market there are plenty of competitive deals to be had, for both homebuyers and people looking to refinance, which, if your rate is about to jump 0.14%, is something you should seriously consider.

Switch to a lower interest rate now

Data indicated here is updated regularly
Loan purpose
Offset account
Loan type
Repayment type
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
$0 p.a.
Up to $4,000 refinance cashback.
A competitive variable rate loan from St.George. Refinancers borrowing $250,000 or more can get up $4,000 cashback for their first application (Other terms, conditions and exclusions apply).
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
$8 monthly ($96 p.a.)
Up to $3,000 refinance cashback.
A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.
UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate
$0 p.a.
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
Athena Celebrate Home Loan - 60% LVR  Owner Occupier, P&I
$0 p.a.
A very low variable rate for home buyers with 40% deposits or equity. This rate takes effect from 30 September for new and existing customers. You can get this rate if you apply today.
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR ≤ 80% (Owner Occupier, P&I)
$0 p.a.
$2,000 to $3,000 refinance cashback.
Get a competitive variable interest rate with no application fee or ongoing fees. Refinance to an eligible Suncorp loan and get a cashback of $2,000 or $3,000, depending on your loan amount. Other conditions apply.

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2 Responses

  1. Default Gravatar
    WendyAugust 30, 2018

    I would like to look at refinancing to a lower interest rate.

    • Avatarfinder Customer Care
      JhezAugust 31, 2018Staff

      Hello Wendy,

      Thank you for your comment.

      Home Loan Refinancing is the process of paying off your current debt with a new one. This means that you are going to borrow new money given that the current interest rate is lower compared to your availed interest rate. Since you’re looking to refinance, first, check with your current lender what they can offer you and if the interest works for you. Second, if the offer of your current lender does not work for you, you may shop around refinancing offers with a lower interest rate. You may check our guide for home loan refinancing here and the current offers. Please compare the rates, terms, fees and features. Speak to the lender and discuss your eligibility. Click the Go to Site button of your preferred lender to apply.

      You may be best to seek advice from a mortgage broker and discuss options based on your needs.

      Should you wish to have real-time answers to your questions, try our chat box on the lower right corner of our page.


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