Invest
Rate hikes: What they mean for you
The “vast majority” of borrowers are set to be stung after two more major banks increased interest rates on Thursday, following Westpac’s move last week.
Rate hikes: What they mean for you
The “vast majority” of borrowers are set to be stung after two more major banks increased interest rates on Thursday, following Westpac’s move last week.
The Commonwealth Bank (CBA) and ANZ increased interest rates for variable rate loans by 0.15 per cent and 0.16 per cent, respectively, with the hike signalling higher monthly payments for most borrowers.
NAB is the only big four bank to have avoided hiking rates so far.
“CBA and ANZ’s decision to hike rates hot on the heels of Westpac was a predicable step in what is becoming a well-worn routine. In fact, hiking on the same day means they can shoulder the backlash together,” RateCity research director Sally Tindall said.
“What this rate hike means is that the vast majority of variable rate home owners will now be shelling out more on their mortgage each month.”
Continuing, she added that while the big banks may move together, customers shouldn’t feel any loyalty.
“If you live in your own home and own at least 20 per cent of it, start shopping around – you’ll be surprised at what rates are on offer,” Ms Tindall said.
“Plenty of lenders are ready and waiting to take on your business with rates as low as 3.44 per cent.”
Graham Cooke, insights manager at Finder, agreed, adding that NAB would likely hike its rate in the coming week as well as other smaller lenders.
“Many others will be taking this opportunity to increase rates in the next few days. With funding costs rising internationally, banks will argue that they didn’t have a choice,” he said.
“Since Westpac moved interest rates north last week, it was inevitable the other big banks would follow suit. The big surprise was that it took over a week. We expect NAB to join the others by next week.”
But what does it mean for me?
For borrowers with $300,000 loans, they're looking at paying an extra $335 a year under CBA's rate change, with borrowers paying back loans of $1 million set to be set back an extra $1,117.
RateCity broke it down further:
CBA
| Loan size | Old standard
variable 5.22% |
New standard variable 5.37% |
Extra monthly repayment | Extra cost annually |
| $300,000 | $1,651 | $1,679 | $28 | $335 |
| $400,000 | $2,201 | $2,239 | $37 | $447 |
| $500,000 | $2,752 | $2,798 | $47 | $559 |
| $750,000 | $4,128 | $4,197 | $70 | $838 |
| $1,000,000 | $5,503 | $5,597 | $93 | $1,117 |
ANZ
| Loan size | Old standard
variable 5.20% |
New standard variable 5.36% |
Extra monthly repayment | Extra cost annually |
| $300,000 | $1,647 | $1,677 | $30 | $357 |
| $400,000 | $2,196 | $2,236 | $40 | $476 |
| $500,000 | $2,746 | $2,795 | $50 | $596 |
| $750,000 | $4,118 | $4,193 | $74 | $893 |
| $1,000,000 | $5,491 | $5,590 | $99 | $1,191 |
Property
Property price growth slows in July, but will this downward trend last?
Despite the impacts of lockdowns on the broader economy, the housing market continued to grow in July, albeit showing signs of an impending slow down, new data has revealed. ...Read more
Property
Millennials believe first home buyers need more support
Australia’s up-and-comers in the housing market say more needs to be done to slow rising house prices. ...Read more
Property
3 in 4 borrowers in trouble are in lockdown: ANZ
Despite offering support, ANZ said freezing home loan repayments will be the last resort, as three in four requests for support stem from NSW. ...Read more
Property
RBA gives APRA’s use of macro tools a tick of approval
Ahead of an expected move to impose tougher lending rules on the banks, the Reserve Bank has looked into previous attempts by APRA to cool the housing market. ...Read more
Property
Federal incentives are driving more first home buyers into the market
While property prices continue to grow, new research suggests that the government’s current crop of first home buyer incentives is having an impact on this segment of the market. ...Read more
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
The Olympic effect on property and equity investors; COVID-19 Disaster Payments and super
Listen now
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Property
Property price growth slows in July, but will this downward trend last?
Despite the impacts of lockdowns on the broader economy, the housing market continued to grow in July, albeit showing signs of an impending slow down, new data has revealed. ...Read more
Property
Millennials believe first home buyers need more support
Australia’s up-and-comers in the housing market say more needs to be done to slow rising house prices. ...Read more
Property
3 in 4 borrowers in trouble are in lockdown: ANZ
Despite offering support, ANZ said freezing home loan repayments will be the last resort, as three in four requests for support stem from NSW. ...Read more
Property
RBA gives APRA’s use of macro tools a tick of approval
Ahead of an expected move to impose tougher lending rules on the banks, the Reserve Bank has looked into previous attempts by APRA to cool the housing market. ...Read more
Property
Federal incentives are driving more first home buyers into the market
While property prices continue to grow, new research suggests that the government’s current crop of first home buyer incentives is having an impact on this segment of the market. ...Read more
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
