Westpac became the latest of the big four banks to raise interest rates after the Reserve Bank of Australia’s decision last week to raise the official cash rate from 0.50% to 2.35%.
The bank will increase its variable mortgage rates by 0.50 percentage points on September 20.
This means that Westpac Life’s total floating rate with bonus interest will increase from 0.50% to 2.35%.
Westpac Bump Savings, for those under 18, full variable rate with bonus interest will increase from 0.65% to 2.35%.
Customers will be able to access a new term deposit offer of 3.25% over 12 to 23 months from Tuesday.
“We understand that many Australians are carefully managing their household budgets at this time and we are here to support our clients through the evolving interest rate cycle,” said Chris de Bruin, Managing Director of Westpac’s personal and business banking services.
“When we revise our interest rates, we seek to balance the needs of multiple stakeholders, including mortgage and deposit customers.
“We also take into account several factors, including the increase in the cash rate, the competitive environment and the performance of our business.”
St George said it would also raise its variable interest rates on home loans by 0.50% from September 20 for new and existing products.
This means that the homeowner’s loan for principal and interest will increase to 6.81%, while the base home loan will increase to 6.23%.
The Commonwealth Bank, NAB and ANZ have already announced that they raise their interest rates 0.50% as of September 16.
Changes will apply to all ABC variable products, including all work-in-progress applications.
The ABC will also raise interest rates on some of its savings products.
GoalSaver with bonus interest rate will increase from 0.60% to 2.10%.
The Youthsaver with subsidized interest rate will also increase from 0.60 percent to 2.30 percent.
The special 3% offer on 18-month CBA term deposits will also be extended.
Certain term deposit interest rates will increase to 0.75% from Monday.
The ABC is also extending its special four-year, 4.99% fixed rate offer for homeowners who pay principal and interest with a home loan package.
The fixed flat rate of 5.49% for three-year interest-only investment property loans is also extended.
ANZ said the change would increase monthly repayments by $125 on a $450,000 variable home loan for a homeowner paying principal and interest.
“While many of our customers remain in a position of strength, we encourage any customer who may be experiencing difficulty to contact our experienced teams as soon as they can to discuss further personalized support,” said Maile Carnegie, Head of ANZ Australia Retail group.
Rachel Slade, NAB Group Director for Personal Banking, said an early conversation with your bank is important to staying on track financially.
“When clients speak to our NAB Assist team early, we find that 90% of our clients are back on their feet within 90 days,” she said.
Rate City research director Sally Tindall said that, like the ABC, Westpac had decided to raise only part of its savings rates this month.
“There will now be pressure on NAB and ANZ to step up after notably leaving savers out of their RBA announcements on Friday,” she said.
“Westpac customers with Life and Bump accounts will see decent increases this month; however, those with eSaver accounts still only earn a rolling rate of 0.85%, which is 1.5 percentage points below the cash rate and 2.75 percentage points behind the market leader.
Meanwhile, ING will be increasing its savings rates and will soon offer a 3.6% rate on its Savings Maximiser account – the highest ongoing savings rate equal alongside Virgin Money.
“If you really want to grow your savings, know that once the increases pass, a competitive rate will be above 3%,” Ms. Tindall said.