Westpac the first big four bank to hike mortgage rates by 0.50% post RBA

Westpac is the first of the big four banks to announce it will pass the RBA cash rate hike on in full to its variable rate home loan customers.

From June 21, Westpac mortgage rates for new and existing customers will go up by 0.50 percentage points.

Westpac variable rates for owner-occupiers – impact of 0.50% hike

Calculations are based on an existing customer, 5 years in to a 30-year loan (70% LVR)

Source: RateCity.com.au. Repayments are for an owner-occupier paying principal and interest with a $500,000 loan over 25 years. The above rates are for LVR up to 70%.  Rates effective June 21.

What has Westpac done for savers?

At this stage Westpac has not announced any interest rate increases to its savings accounts.

However, the bank will offer a 12-month term deposit with a rate of 2.25 per cent from June 9. That’s 2 percentage points higher than Westpac’s current 12-month term deposit rate of 0.25 per cent.

Analysis from RateCity.com.au shows the current highest 12-month term deposits is 2.90 per cent from AMP, Firstmac and Goldfields Money and there are 8 banks offering higher 12-month term deposit rates than Westpac.

RateCity.com.au research director, Sally Tindall, said: “It is no surprise to see Westpac hike home loan rates by the full 0.50 percentage points.”

“We expect the other big banks to follow Westpac’s lead and also pass on the RBA rate hike in full to their mortgage customers,” she said. 

“Although Westpac has put a 2.25 per cent 12-month term deposit on the table, it’s hugely disappointing to see the bank hasn’t passed anything onto its existing savings accounts at this stage.

“Let’s just hope Westpac re-thinks its savings account rates in the coming days and passes at least something onto these customers,” she said.

The latest APRA statistics for April show Australian households have a total of $1.27 trillion in the bank – an increase of $281 billion since COVID.

“Many banks remain unwilling to substantially hike their savings rates until Australians start burning through some of the record amount of cash they’ve got stashed away,” she said.

Compare home loans in Australia