Westpac announces home loan rate hike: Who’s next?
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.
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.
|Loan||Interest rate (p.a.)|
|ANZ Standard Variable Home Loan||4.39% 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 Interest||5.38% 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:
- ANZ Simplicity PLUS Home Loan - LVR ≤ 80% Special Offer Discount (Owner-Occupier, PI): 3.65% interest rate.
- NAB Choice Package Home Loan - 2 Year Fixed (Owner-Occupier P&I) First Home Buyer Special: 3.69% interest rate.
- Westpac Flexi First Option Home Loan - 2 Years Introductory Special Offer (New Owner-Occupier, P&I): 3.59% interest rate (from 19 September, 3.73%)
- Commonwealth Bank Extra Home Loan - 2 Year Introductory Rate (Owner-Occupier) P&I: 3.69% (for first home buyers only).
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.
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