Yahoo Finance Westpac, NAB hike home loan interest rates
The two major banks have hiked their fixed rates, while Westpac has also hiked variable rates for new customers.
Aussies wanting to take out a new home loan with Westpac or NAB now face higher interest rate costs.
The two major banks have hiked their fixed rates for new customers, while Westpac has also increased its lowest variable home loan rate.
Westpac, Australia’s second-biggest lender, has hiked most of its fixed-rate home loans by between 0.10 and 0.20 per cent. Its 3-year fixed-rate home loan now has a new interest rate of 6.59 per cent.
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The bank’s Flexi First Option Home Loan interest rate has increased 0.10 per cent - on top of the Reserve Bank’s (RBA) November rate hike, which kicked in on Tuesday.
New owner-occupier customers, paying principal and interest, will now have to pay a rate of 6.44 per cent for the first two years, before this rises by 0.40 per cent.
Meanwhile, NAB has increased its fixed rates by between 0.05 and 0.25 per cent. Owner-occupier customers taking out its 3-year fixed-rate home loan are now looking at paying 6.59 per cent.
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Flood of fixed-rate hikes
RateCity research found 60 lenders had increased at least one of their fixed-rate loans over the past month, including CBA, Adelaide Bank, AMP, ING and Macquarie Bank.
Research director Sally Tindall said today’s move by Westpac and NAB was to “protect their margins in the face of an uncertain economic outlook”.
“The home loan market has been flooded with hikes over the last month, as banks move their fixed rates to higher ground,” Tindall said.
“With another cash rate hike potentially still on the cards, and a growing expectation that the cost of funding will remain high well into 2024, banks are racing each other to increase fixed rates.”
Tindall said the strategy wouldn’t rock the boat, since only a small fraction of borrowers were opting for a fixed-rate home loan right now.
As for variable rates, RateCity found Westpac and ANZ now had the equal-lowest advertised variable rate out of the Big Four at 6.44 per cent. However, Westpac’s only lasts for two years.
“While this might make ANZ the clear winner out of the Big Four banks’ lowest variable rates, it’s not even in cooee of the market leaders, a handful of which are still offering rates under 6 per cent following their November RBA increases” Tindall said.
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