Westpac becomes first major to hike fixed rates

Adam Smith 28 November 2016

money graphThe bank is the first of the majors to follow other lenders' recent fixed rate increases.

Westpac announced Friday it would raise the rates on its five-year fixed rate mortgage for owner occupiers by 54 basis points, the Sydney Morning Herald has reported. The bank also raised rates on its two- and three-year fixed rate loans by 0.3%, while its one- and four-year fixed rate loans remained untouched.

Property investors were dealt a steeper rate hike. Westpac’s five-year fixed rate for property investment loans will rise 60 basis points, the SMH said.

The changes come into effect from this week, and also apply to the bank’s subsidiary brands, St.George and RAMS. Westpac customers who already have a fixed rate product through the bank will not be affected.

ANALYSIS: Which lenders have moved rates in December already?

The hikes come after a flurry of rate rises by lenders in the wake of the US presidential election. Variable rates are also beginning to see rises, with UBank announcing it would lift rates on its owner occupier, investor, principal and interest and interest-only loans by 0.10% from 2 December.

Other lenders who have made changes include Suncorp, who raised their two- and three-year fixed rates but dropped their one- and five-year fixed rates. ING DIRECT also upped their fixed rates from between 10 basis points up to 40 basis points ascending with increasing fixed rate term lengths.

Smaller lenders have made changes to only one or two of their products compared to the larger lenders. Teachers Mutual Bank lifted rates on their four- and five-year fixed rates for both owner occupiers and investors, increasing four-year fixed rates by 0.25% and five-year fixed rates by 0.31%. ME Bank, meanwhile, increased their two- and three-year fixed rates by 10-15 basis points, but also made some adjustments to their Flexible Home Loan with Members Package variable rates.

How did rates move?

LenderChangeLoans affected
WestpacUp 0.24 - 0.60%2, 3 and 5 Years Fixed Rate Home Loan (self-employed, investment and owner occupier), 2, 3 and 5 Years Fixed Rate Home Loan with Premier Advantage Package (self-employed, investment and owner occupier)
St.GeorgeUp 0.24 - 0.60%2, 3 and 5 Years Fixed Rate Home Loan, Fixed Rate Advantage Package Home Loan (owner occupier + investor), 2, 3 and 5 Years Fixed Rate Portfolio Home Loan, 3 and 5 Years Fixed Rate Low Doc Home Loan (owner occupier + investor)
ME BankUp 0.10 - 0.15%2 Years Fixed Rate Home Loan (owner occupier), 2 Years Fixed Rate Home Loan with Members Package (owner occupier), 3 Years Fixed Home Loan (owner occupier + investor), 3 Years Fixed Rate Home Loan with Members Package (owner occupier + investor)
RAMSUp 0.25 - 0.40%2, 3 and 5 Years Fixed Rate Home Loan (owner occupier + investor), 2, 3 and 5 Years Fixed Rate Self-Employed Home Loan (owner occupier + investor)
ING DIRECTUp 0.10 - 0.40%Fixed Rate Home Loan (owner occupier + investor)
BankSAUp 0.24 - 0.60%2, 3 and 5 Years Fixed Rate Home Loan, Fixed Rate Advantage Package Home Loan (owner occupier + investor), 2, 3 and 5 Years Fixed Rate Portfolio Home Loan, 3 and 5 Years Fixed Rate Low Doc Home Loan (owner occupier + investor)
SuncorpUp 0.15%2 and 3 Years Fixed Rate Home Loan (investor), 2 and 3 Years Fixed Rate Home Loan with Package Plus (investor), 3 Year Interest in Advance
Teachers Mutual BankUp 0.25 - 0.30%4 and 5 Years Fixed Rate Home Loan (owner occupier + investor)
Bank of MelbourneUp 0.24 - 0.60%2, 3 and 5 Years Fixed Rate Home Loan, Fixed Rate Advantage Package Home Loan (owner occupier + investor), 2, 3 and 5 Years Fixed Rate Portfolio Home Loan, 3 and 5 Years Fixed Rate Low Doc Home Loan (owner occupier + investor)
WestpacDown 0.20%1, 4, 6, 7, 9 and 10 Years Fixed Rate Home Loan (investor)
SuncorpDown 0.35 - 0.40%1 and 5 Years Fixed Rate Home Loan (owner occupier + investor), 1 and 5 Years Fixed Rate Home Package Plus Home Loan (owner occupier + investor), 1 and 5 Years Interest in Advance Home Loan

There are still more rate changes tipped to occur before the RBA meets next Tuesday for the last time this year. The Reserve Bank is expected to once again leave the cash rate untouched, but lenders seem unlikely to follow suit.

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