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Westpac raises rates for 3rd time in a month

·2-min read
An aerial view of an Australian suburb and the Westpac symbol in a shop window.
Westpac has hiked it's fixed mortgage rates for the third time in a month. (Source: Getty)

Australia’s second-largest bank, Westpac, has hiked its fixed rates for the third time in a month.

Today’s hikes affect both owner-occupier and investor rates across the Westpac Group, including St George, Bank of Melbourne and BankSA.

Like the Commonwealth Bank (CBA) and ANZ, Westpac now has no advertised fixed home loan rate under 2 per cent. Only NAB has one fixed rate starting with a ‘1’.

Westpac hikes for owner-occupiers paying principal and interest

Chart showing interest rate changes.
(Source: RateCity.com.au)

Rates have increased for both owner-occupier and investors with monthly repayments for a $500,000 loan increasing by between $27 and $78.

On 19 October, Westpac hiked its 2- to 5-year rates by 0.1 per cent and then hiked it’s 3- to 5-year rates by between 0.1 to 0.21 per cent on 4 November.

Rate rise wars

Analysis of the RateCity.com.au database shows banks are moving swiftly to hike fixed rates.

In the past month, 16 lenders have hiked fixed rates twice, including CBA, NAB and ANZ, while Westpac is the first bank to hike fixed rates three times.

Chart showing interest rate changes.
(Source: RateCity.com.au)

“The banks have hit the accelerator on fixed-rate hikes. They’re coming in thick and fast and they’re typically getting bigger with each hike,” RateCity.com.au research director Sally Tindall said.

“At first, the fixed-rate hikes were isolated to longer-term rates, but now banks are lifting across the board at an extraordinary pace.”

Tindall said fixed-rate hikes were more than speculation that the cash rate could rise earlier than expected.

“The cost of wholesale funding is increasing, and the banks have decided it’s not sustainable to keep fixed rates at ultra-low levels,” she said.

“Customers waiting in the queue for their fixed loans to settle will be rightly frustrated at these rapid rate rises, unless they had locked in their rate.”

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