Big four banks to pass on full rate rise to customers

The four major banks will all increase mortgage rates by 0.5 percentage points, passing on the Reserve Bank’s latest rate rise to customers in full.

The Commonwealth Bank of Australia, ANZ Bank and NAB on Wednesday followed Westpac in announcing an increase in variable mortgage rates, which will come into effect towards the end of next week.

The Reserve Bank increased the cash rate by 0.5 percentage points on Tuesday afternoon. Credit:Paul Rovere

The Reserve Bank on Tuesday announced a 0.5 percentage point rise in official interest rates, the biggest one-month increase in more than two decades, taking the cash rate to 0.85 per cent.

Westpac was the first major lender to increase mortgage interest rates on Tuesday night, followed by Macquarie Bank, CBA, ANZ and NAB on Wednesday afternoon.

In a statement, the CBA’s retail banking services group executive Angus Sullivan said the new home loan variable interest rates would take effect on June 17. “We are here to support Australian households who may be concerned about their home loan repayments,” he said.

CBA also announced it would increase the bonus interest rate on several of its savings products by 0.5 per cent, and extend the availability of its 18-month term deposit offer of 2.25 per cent.

ANZ head of retail banking Maile Carnegie said: “We know rate changes affect customers differently and some may be looking for support as they reorganise their household budgets, particularly if they haven’t experienced many rate increases before.”

NAB personal banking group executive Rachel Slade said the bank had seen an increase in customers asking for support. “There was a spike in the number of customers making lending support contact on the day after the May rate increase, and many customers have been accessing online tools to manage their home loans including through the NAB app. We are here to help any customer who needs support,” she said.

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