All four of Australia’s big banks have announced they are hiking interest rates on mortgages in line with the Reserve Bank’s 11th increase.
The central bank hiked the cash rate by 0.25 percentage points to 4.10 per cent – the highest level since April 2012 – when it met on Tuesday, with a warning there could be more hikes on the way.
The NAB, Commonwealth Bank and ANZ made their announcements on Friday afternoon.
Westpac was the first to pass on the RBA’s latest interest rate rise announced just hours after the RBA made its decision.
CBA says it is also increasing interest rates across “a number of saving products”.
“All home loan variable rate changes announced today will be effective 16 June 2023,” the CBA said.
ANZ also announced its hike on Friday, but made no announcement on rates for savings accounts.
“Effective 16 June 2023, ANZ will increase variable interest rates for home, residential investment, and line of credit home loans by 0.25 per cent per annum,” it said.
NAB then followed, with saying its standard variable home loan interest rate will increase by 0.25 per cent effective from June 16.
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But it also announced an increase for bonus interest rate for its Reward Saver and its 12-month term deposit.
NAB Group Executive for Personal Banking, Rachel Slade said the bank was contacting customers who might need additional support.
“Each rate increase since May last year has been incrementally challenging for Australian households,” she said.
“We know from speaking with our customers that most are in good shape, however there are some who need our additional support.
“We’re proactively reaching out to our customers to offer help and have a range of options available to assist them through the rising cost of living.”
On Thursday, another major lender AMP Bank, announced it was passing on the full RBA rise. Other lenders are expected to follow suit.
RateCity.com.au research director Sally Tindall welcomed the decision by some of the banks to pass on the rate rise to savings accounts.
“CBA has done the right thing and passed on the entire rate hike to every one of its savings customers, which is fantastic to see,” she said.
“This will hopefully put pressure on the other big banks to reassess their savings rates and pass on full hikes.
“At this stage, both Westpac and ANZ have not announced a single rate hike for their savings customers. That’s simply not good enough.”
She urged customers to contact their banks if they are feeling the pinch.
“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable time frame, but that will depend upon how the economy and inflation evolve,” Dr Lowe said in the official statement released after the announcement.
Since May 2022, the RBA has aggressively raised rates from a record low 0.1 per cent in a bid to tame runaway inflation.
Monthly figures released by the ABS last week show the annual inflation rate jumped from 6.3 per cent to 6.8 per cent in April. The next set of quarterly data isn’t due until next month.
But inflation remains well above the bank’s target range of two to three per cent.
Dr Lowe said Tuesday’s rate hike would “provide greater confidence” that inflation will return to target “within a reasonable time frame”.
“Inflation in Australia has passed its peak, but at 7 per cent is still too high and it will be some time yet before it is back in the target range,” he said.
“The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”