How have the big-four banks reacted following August's cash rate increase?

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on August 02, 2022 Fact Checked
How have the big-four banks reacted following August's cash rate increase?

CBA, ANZ, Westpac and NAB have all passed on the RBA's cash rate increase in full to both mortgage holders and savers.

With a 50 basis point increase to the cash rate in August now set in stone, if trends are anything to go by customers can expect the major banks to pass on another 0.50% increase to mortgage rates.

PropTrack Senior Economist Eleanor Creagh said as the cash rate moves higher, borrowing capacities will be constrained and the cost of servicing a mortgage will also increase significantly.

"This will impact would-be borrowers and weigh on home prices," Ms Creagh said.

"For sellers, it’s time to reset price expectations and be mindful that your property may take longer to sell with fewer competing bidders.

"For those looking to get into the market, there will be less competition and a lot more choice that could create opportunities for some."

This page will detail the latest reactions across the big-four banks following the RBA's latest 50 basis point cash rate hike - be sure to check back here regularly. 

CommBank

It took more than a day for any of the major banks to react following the RBA's decision on Tuesday, however Australia's largest bank has become the first of the majors to make a move. 

Announcing Thursday, CommBank will increase home loan variable interest rates by 0.50% p.a. for owner occupiers and investors from 12 August. 

CommBank's Group Executive Retail Banking Angus Sullivan said for customers looking for greater certainty around future mortgage repayments, CommBank will offer a special 4-year Owner Occupier Principal and Interest fixed home loan package rate of 4.99% p.a. from 5 August. 

"This special is a reduction of 1.60% p.a. from our current 4-year fixed package rate and has been rolled out especially to support customers looking for certainty in a changing rate environment," Mr Sullivan said.

CommBank notes the comparison rate for the new 4-year fixed package rate is 5.46% p.a.

Mortgage rates aside, CommBank will also pass on the increase to savers, increasing rates across savings and select term deposit products. 

CommBank's NetBank Saver standard variable interest rate will increase by 0.50% p.a. to 0.85% p.a. from 12 August, with the five-month introductory variable rate offered to new customers will increase by 0.50% p.a. to 1.80% p.a.

Australia's largest bank will also launch a new 18-month Term Deposit with a special offer rate of 3.00% p.a. from 8 August. 

“We want to support our customers where we can, and that includes increasing select deposit rates so they can achieve a better return on their savings and manage any pressures to their family budget associated with cost of living,” Mr Sullivan said.

ANZ

The second major bank to respond to the RBA's Tuesday decision was ANZ, announcing they will pass on the full 0.50% increase to variable rate home loans for owner occupiers and investors from 12 August. 

ANZ Group Executive Australia Retail Maile Carnegie said the persistent low-rate environment of recent years has been challenging for savings customers, so ANZ has tried to provide some relief with a range of deposit rate increases.

ANZ will also increase the rate on ANZ Plus Save account balances of less than $250,000 by 0.50% p.a. to 2.50% p.a. from 8 August.

The offering of 2.50% p.a. from ANZ is now one of the most competitive savings account rates across the big-four banks. 

Westpac

Following the Thursday trend, Westpac will be passing on the 0.50% increase to variable rate home loans for owner occupiers and investors from 18 August. 

Westpac Chief Executive of Consumer and Business Banking Chris de Bruin said with every interest rate change, Westpac considers multiple factors and stakeholders, including homeowners and savers.

"The change in home loan interest rates will mean many customers will be reviewing their budgets," Mr de Bruin said. 

"We’re putting a competitive fixed rate offer on the table to help give our customers more options as interest rates rise."

Westpac's new four-year fixed rate home loan offers a rate of 4.99% p.a. for owner-occupied customers on principal and interest repayments with the Premier Advantage Package from 9 August.

Savers won't be missing out, with Westpac to increase rates by up to 0.55% across Westpac Life, Spend & Save and eSaver accounts. 

Notably, Westpac Spend & Save account for 18-29 year olds will see customers able to earn one of the highest rates on the market at 3.25% p.a. on balances up to $30,000.

    Westpac customers will be able to access a new Term Deposit offer of 3.00% p.a. for 12 to 23 months, effective 8 August.

    NAB

    Rounding out the big-four, on Thursday NAB announced it will also be passing on the full 0.50% increase to variable rate home loans and savings accounts.

    Increases to both variable home loan and savings accounts will take effect from 12 August. 

    For savers, NAB will increase its iSaver and Reward Saver account to 1.80% and 1.75% p.a. respectively. 

    NAB Group Executive Personal Banking Rachel Slade said NAB was here to help all customers, particularly those who might find increasing home loan rates challenging. 


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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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