Several Australian major banks including Westpac, NAB and ANZ have increased interest rates following a decision from the Reserve Bank (RBA) to raise the cash rate for the eighth consecutive time.
“Following the Reserve Bank of Australia’s decision to increase the cash rate by 0.25%, Westpac has announced a range of interest rate changes for deposit and home loan customers,” Westpac said in a statement .
“The standard variable NAB home loan interest rate will increase by 0.25% p.a., effective from 16 December 2022,” NAB said in a statement. “Variable interest rates across ANZ’s Australian home loans will increase by 0.25%pa, effective Friday 16 December,” ANZ said in a statement.
RBA Governor Philip Lowe said on Tuesday (Dec. 6) the Board “expects to increase interest rates further over the period ahead, but it is not on a pre-set course.”
He also noted that the “size and timing of future interest rate increases will continue to be determined by the incoming data” and by the “Board’s assessment of the outlook for inflation and the labor market.”
Tuesday’s widely anticipated decision takes the central bank’s cumulative hikes since May to 3 percentage points, the sharpest annual tightening since 1989.
The rise will typically add $75 to the monthly payment on a 25-year, $500,000 mortgage, RateCity said.
Mortgage borrowers are all but guaranteed at least one month of reprieve from further rate rises over summer (it’s summer in Australia now), as the RBA isn’t scheduled to hold another board meeting until it returns from its summer break in early February.
Meanwhile, real estate transaction volumes are down 13.3% on this time last year, with the monthly value of secured finance — mortgages — off nearly 18% since rates started rising in May, according to CoreLogic data.
Shadow Treasurer Angus Taylor told ABC News that today’s interest rate decision means some Australian families “will struggle through Christmas”. “And it will get worse in the New Year when the lag flows through. As you know, [there is a] lag because the banks take time to pass them through and secondly because many are moving from flexible rates to fixed rates.”
With reporting by ABC News and The Guardian