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ANZ and Westpac lift fixed rates while the RBA eyes off another double cash rate hike

ANZ and Westpac lift fixed rates while the RBA eyes off another double cash rate hike

Australia’s fourth largest lender, ANZ, has today hiked fixed rates by up to 0.90 percentage points.

This comes a day after Westpac hiked fixed rates by 0.50 percentage points for customers looking to lock in their rate.

ANZ owner-occupier principal and interest fixed rate changes

TermOld rateNew rateChange
1-yr fixed

3.79%

4.69%

0.90%

2-yr fixed

4.59%

5.49%

0.90%

3-yr fixed

4.99%

5.89%

0.90%

4-yr fixed

5.09%

5.99%

0.90%

5-yr fixed

5.19%

6.09%

0.90%

Note: Above rates are for owner-occupiers paying principal and interest on a package rate with a loan-to-value ratio of 80% or less.

Westpac owner-occupier principal and interest fixed rate changes

TermOld rateNew rateChange
1-yr fixed

3.59%

4.09%

0.50%

2-yr fixed

4.29%

4.79%

0.50%

3-yr fixed

4.69%

5.19%

0.50%

4-yr fixed

4.79%

5.29%

0.50%

5-yr fixed

4.89%

5.39%

0.50%

Source: RateCity.com.au. Note: rates are for owner-occupiers paying principal and interest with an LVR of 70% or less.

Variable rates set to continue to rise

Fixed rates aren’t the only loans undergoing a major transformation. Yesterday, RBA Governor, Philip Lowe, said the Board would consider hiking the cash rate again next month by either 0.25 percentage points or 0.50 percentage points.

If the RBA hikes by 0.25 percentage points in July, someone with a $500,000 loan could see their repayments rise by an additional $68 a month.

If the RBA hikes by 0.50 percentage points, that same borrower would see their monthly repayments rise by an extra $137.

Increase in repayments if the RBA hikes by 0.25% in July

Calculations are for existing customers and based over 25 years

Loan sizeIncrease in repayments (July)Total increase
May + June + July @ 0.25%
$500,000

$68

$264

$750,000

$102

$396

$1 million

$136

$529

Source: RateCity.com.au. See notes below.

Increase in repayments if the RBA hikes by 0.50% in July

Calculations are for existing customers and based over 25 years

Loan sizeIncrease in repayments (July)Total increase
May + June + July @ 0.50%
$500,000

$137

$333

$750,000

$205

$499

$1 million

$273

$665

Source: RateCity.com.au. Based on an owner-occupier paying principal and interest with 25 years remaining. Starting rate is the RBA average existing owner-occupier variable rate of 2.86% and assumes banks pass the cash rate hikes on in full.

RateCity.com.au research director, Sally Tindall, said: “ANZ and Westpac have fired off yet another round of hikes as the cost of fixed-rate funding continues to rise, alongside market expectations the cash rate could hit 4 per cent.”

“We’ve now got fixed rates for owner-occupiers starting with a ‘5’ and in some cases a ‘6’,” she said.

“RateCity.com.au analysis shows the majority of ANZ’s owner-occupier fixed rates have risen by 3.5 percentage points or more in the last 12 months. One of the biggest rises has been to the bank’s 3-year fixed rate – it has shot up by 3.85 percentage points in less than a year.

“While Governor Lowe has poured cold water on suggestions the cash rate could get to 4 per cent by Christmas, the Board is likely to continue its rapid-fire approach to cash rate hikes over the next six months.

“The RBA is ripping the low-rate band-aid off, and quickly. For many Australians it’s going to sting.

“Variable rate borrowers should prepare themselves for another double hike in July and for the cash rate to rise above 2 per cent by Christmas – potentially well above this mark.

“Households with savings buffers in place and pay rises under their belts should be able to adjust to a more normal rate environment without too much grief. However, there will be plenty of families who will soon find it difficult to balance the monthly budget, particularly if the cost of living continues to spike, as it’s expected to do.

“If you don’t think you’ll be able to make ends meet by Christmas, start making changes now. Review all your regular bills and expenses to see where you can make cutbacks, or potentially switch to a more competitive deal.

“If you can’t see a path through, put up your hand and ask for help. There are experts that can provide free financial advice to help you chart a course through these difficult financial times,” she said.

ANZ lowest fixed rates – 1 year ago vs today

Term1 year agoTodayChange
1-yr fixed

2.04%

4.69%

2.65%

2-yr fixed

1.94%

5.49%

3.55%

3-yr fixed

2.04%

5.89%

3.85%

4-yr fixed

2.49%

5.99%

3.50%

5-yr fixed

2.69%

6.09%

3.40%

Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest with an LVR of 80% or less.

Lowest big four bank rates for owner-occupiers paying principal and interest

(note: interest-only and investor rates are higher)

Rate typeCBAWestpacNABANZ
1-yr fixed

3.59%

4.09%

3.59%

4.69%

2-yr fixed

4.39%

4.79%

4.59%

5.49%

3-yr fixed

4.99%

5.19%

4.99%

5.89%

4-yr fixed

5.19%

5.29%

5.39%

5.99%

5-yr fixed

5.29%

5.39%

5.49%

6.09%

Lowest variable

2.94%

2.64% for two years then 3.04%

2.94%

2.79%

Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest. Some LVR requirements apply.

Lowest home loan rates on RateCity.com.au

Rate typeLenderAdvertised rate
1-yr fixedUnity Bank

2.74%

2-yr fixedThe Capricornian

2.89%

3-yr fixedIMB

3.89%

4-yr fixedbcu

4.49%

5-yr fixedIMB

4.49%

Lowest variable (post June hike)Reduce, Homestar Finance

2.44%

Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest. Some LVR requirements apply.

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This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

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