Westpac will increase mortgage interest rates by 0.5 percentage points, passing on the Reserve Bank’s latest official rate rise to customers in full.
The Sydney-based banking giant was the first major lender to announce its interest rate decision on Tuesday night, saying it would lift variable home loan rates by 0.5 percentage points from June 21.
Westpac will lift variable home loan interest rates by 0.5 percentage points.Credit:Will Willitts
It said it would also offer a one-year term deposit rate of 2.25 per cent, and other deposit rates were under review.
The chief executive of consumer and business banking at Westpac, Chris de Bruin, said most of its customers were ahead on their loan repayments, but pointed to options for customers who needed help. These could include the possibility of adjusting loan terms, or for customers in financial stress, using the lender’s hardship program.
“Our customers have managed their finances carefully during the pandemic, with many putting more funds aside in their savings and offset accounts. This means the majority of our customers are ahead on mortgage repayments and have a buffer available to help them manage an interest rate increase,” de Bruin said.
“For customers who need some extra help or who are in financial difficulty, we have our specialist teams standing by who will work with them to tailor a financial solution to meet their needs. We encourage customers doing it tough to call us as soon as possible.”
Westpac’s key rivals Commonwealth Bank, ANZ Bank and National Australia Bank had not announced their decision on interest rates at the time of writing.
The move comes after the Reserve Bank surprised the market by lifting the cash rate by 0.5 percentage points on Tuesday to 0.85 per cent and warned there would be further rate rises to come.
RateCity said monthly repayments on an average new loan in NSW would lift by $208 as a result of the change, while repayments on an average new loan in Victoria would increase by $169 a month.
The RBA’s rate rise sparked a fall in bank shares, as investors worried about the risk of higher bad debts, and prompted economists to predict there would be more interest rate increases over the coming months.
Following the surprise move, Commonwealth Bank economists lifted their forecast for the cash rate this year and predicted a 0.5 percentage point cash rate increase in July, followed by a 0.25 percentage point move in August. CBA economists also said they would cut their forecasts for economic growth for 2022 and 2023.
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2022-06-07 09:54:26Z
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