How did the the big-four banks react to RBA's July cash rate increase?

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on July 06, 2022 Fact Checked
How did the the big-four banks react to RBA's July cash rate increase?

CommBank, ANZ, NAB, and Westpac have all responded following RBA's decision to lift the cash rate to 1.35%.

Following the RBA going back-to-back with 50 basis point increases, the major banks are sitting on their hands with increases to variable home loan rates expected. 

In previous months, the big-four have taken some time to react post-cash rate increase however have passed on the increases of 25 basis points and 50 basis points in full to variable home loan rate customers. 

See how the major banks reacted in June, while watch this space for further announcements following July's cash rate decision.

CommBank 

Australia's largest bank is the first to bite following the RBA's July cash rate decision, increasing variable home loan rates by 50 basis points from 15 July 2022. 

CommBank's new standard variable reference rates are:

  • Owner Occupier Principal and Interest Standard Variable Rate home loans will increase by 0.50% p.a. to 5.80% p.a.
  • Investor Principal and Interest Standard Variable Rate home loans will increase by 0.50% p.a. to 6.38% p.a.
  • Owner Occupier Interest Only Standard Variable Rate home loans will increase by 0.50% p.a. to 6.29% p.a.
  • Investor Interest Only Standard Variable Rate home loans will increase by 0.50% p.a. to 6.64% p.a.

Comparison rates are to be published from 15 July 2022 as the new rates come into effect. 

ANZ 

ANZ has increased variable home loan rates by 50 basis points in line with RBA's July decision from 15 July 2022.

ANZ's new standard variable reference rates are:

  • Owner Occupier Principal and Interest Standard Variable Rate home loans will increase by 0.50% p.a. to 5.64% p.a.
  • Investor Principal and Interest Standard Variable Rate home loans will increase by 0.50% p.a. to 6.24% p.a.
  • Owner Occupier Interest Only Standard Variable Rate home loans will increase by 0.50% p.a. to 6.19% p.a.
  • Investor Interest Only Standard Variable Rate home loans will increase by 0.50% p.a. to 6.49% p.a.

Comparison rates are to be published from 15 July 2022 as the new rates come into effect. 

ANZ Head of Australian Economics David Plank noted the RBA cited strong demand, a tight labour market and capacity constraints are key factors to determining July's 50 basis point increase.

"Job vacancies and ANZ Job Ads indicate the labour market is still tightening, increasing the urgency of the RBA's need to get to at least neutral," Mr Plank said. 

"We view the 50 basis point move in August as a 'bring forward' on our previous call (of 25 basis points), rather than a move to a higher terminal rate."

NAB 

Following the lead of the RBA, NAB is set to increase variable home loan rates by 50 basis points from 15 July 2022.

NAB's new base variable reference rates are:

  • Owner Occupier Principal and Interest Base Variable Rate home loans will increase by 0.50% p.a. to 5.64% p.a.
  • Investor Principal and Interest Base Variable Rate home loans will increase by 0.50% p.a. to 6.16% p.a.
  • Owner Occupier Interest Only Base Variable Rate home loans will increase by 0.50% p.a. to 5.68% p.a.
  • Investor Interest Only Base Variable Rate home loans will increase by 0.50% p.a. to 6.01% p.a.

NAB Group Executive of Personal Banking Rachel Slade said NAB was determined to work closely with customers to provide support throughout the rapidly changing rate environment.

“Banks are here to serve their customers, so regardless of who you bank with, the first step is a conversation with a banker so we can find the best way to support you,” Ms Slade said.

“Overall, our customers are in good position with many ahead on their repayments." 

Westpac 

From 20 July Westpac will increase variable home loan rates by 50 basis points for new and existing customers.

From 22 July, the Westpac Life savings account base interest rate will also get a bump to 1.35% p.a.

This means its popular under-30s savings account rate could get boosted to 3.00% p.a.

The major bank is also offering a 2.50% p.a. 12-23 month term deposit rate, accessible from 8 July.

“We considered several factors in making this decision including the 0.50% rise in the official cash rate and ongoing increases in the cost of funding, as well as the needs of both borrowers and depositors,” said Chris de Bruin, Westpac Chief Executive Consumer and Business Banking.

Westpac Chief Economist Bill Evans said since the RBA began announcing the cash rate publicly in 1990 it has never raised the cash rate in two consecutive meetings by 50 basis points each.

"However, the Governor’s (RBA) statement made no reference to that historical precedent something that may have been done if he was signalling the intention to scale back the moves," Mr Evans said. 

Westpac expects the RBA to go back-to-back-to-back, like the early 00s Brisbane Lions, with another 50 basis point increase to the cash rate at its meeting come August. 


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender

Variable
More details
  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws

Variable Home Loan (LVR < 70%)

  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws
Variable
More details
REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
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AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO ONGOING FEES

Yard PAYG Home Loan (Principal and Interest) LVR ≤ 80%

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of August 11, 2022. View disclaimer.


Image by Alex Kondratiev via Unsplash 



Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

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