Australia’s biggest banks are in the midst of a rate-hike race with both ANZ and NAB increasing mortgage rates since Thursday.
ANZ revealed it would increase fixed rates by up to 0.40 per cent on Friday, marking the second ANZ rate hike in three weeks.
ANZ rate hikes
That means that ANZ now has no advertised rates below 2 per cent, while NAB has just its 1-year 1.99 per cent fixed rate.
And on Thursday, NAB announced it would increase its fixed rates by up to 0.51 per cent. NAB has now lifted fixed rates twice in five months.
NAB rate hikes
“Banks are raising fixed rates at breakneck speed, as the economy rebounds and funding costs increase,” RateCity research director Sally Tindall said.
“What started as minor adjustments by the banks has turned into a significant and sustained move north for fixed rates.”
Lowest big four bank owner-occupier home loan rates
“The number of fixed rates under 2 per cent is dropping rapidly. While there’s still plenty of choice among short-term rates, there are now just four 3-year fixed rates under 2 per cent and no 4- or 5- year rates under this mark,” she said.
What does it mean for borrowers?
The rate-hike frenzy means that an owner-occupier taking out a $500,000 principal and interest loan with a 3-year fixed rate will pay an extra $162 per month on average, compared to someone taking out the same mortgage six months ago.
Average big four bank fixed rates then and now
“Customers currently in the queue for a fixed rate should consider paying a rate lock fee in this environment,” Tindall said.
“The number of fixed rates under 2 per cent is dropping rapidly. While there’s still plenty of choice among short-term rates, there are now just four 3-year fixed rates under 2 per cent and no 4- or 5- year rates under this mark [across RateCity’s database].”