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

Posted: 29 August 2018 4:23 pm
News
money hand stop

The 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.

Latest home loans headlines

Image: Shutterstock

Get more from Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

2 Responses

    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.

      Regards,
      Jhezelyn

Go to site