September RBA wrap – find out who’s moved home loan and savings rates

Following the RBA’s 0.50 percentage point hike last Tuesday, here’s how the big four bank home loan and savings rates are changing.

HOME LOANS

• 18 banks have so far announced their variable mortgage rate rises, a live list is here.
• All big four banks have lifted rates by 0.50% points for new and existing customers.
• The lowest big four bank home loan rate will be 3.99%, however, this rate from Westpac is only for 2 years, after which it increases by 0.40% points.
• RateCity.com.au expects at least 10 lenders will still offer variable rates under 4 per cent once the September hikes take effect.

Big four banks – post RBA mortgage rates

Owner-occupiers paying principal and interest

Source: RateCity.com.au. Note some loan-to-value ratios apply. Rates effective 16 – 20 September.

Existing big four variable mortgage customers have now seen their rates rise by 2.25 per cent since the RBA started hiking in May. However, the banks’ lowest variable rates have not risen by as much for new customers.

Big four bank lowest rates for new customers, then and now

Owner-occupiers paying principal and interest

Source: RateCity.com.au. Note some loan-to-value ratios apply.

SAVINGS RATES

CBA and Westpac have announced hikes for their bonus and kids savings accounts. However, NAB and ANZ have not announced any savings rate increases for their customers so far.

Savings rates – what the big banks have announced in September

While CBA and Westpac have increased their bonus savers this month, none of the big four have passed on the full 2.25 percentage points of RBA hikes across May - September to their savings customers.

Big four banks main savings accounts – change since start of hikes

Source: RateCity.com.au. Note: * rates effective 16 & 20 Sept, NAB and ANZ rates under review. Conditions apply for maximum rates.

Key changes from market leaders

• ING is increasing its Savings Maximiser by 0.50% points to 3.60% from 15 September.
• ubank is increasing its Save account by 0.50% points to 3.35% from 1 October.
• Macquarie is increasing its transaction account by 0.50% points to 2.75% from 16 September.
• 8 banks have so far announced hikes of 0.50% points or more to at least one savings account since the RBA Sept meeting.

Highest savings rates to date

Source: RateCity.com.au. Note: conditions apply for max rate.

RateCity.com.au research director, Sally Tindall, said: “CBA and Westpac might have passed on decent hikes to key savings accounts this time around, but that doesn’t automatically mean they are competitive rates.”

“While NAB and ANZ have left their savers in the cold so far, peer pressure could force them to re-think their announcement,” she said.

“If your bank hasn’t yet announced a decent hike to your savings rate, now is the time to question this decision.

“Call, email, or better yet, use social media to ask them ‘why?’.

“A cracking savings rate after this latest round of hikes will be over 3.50 per cent. Anything below 2.50 per cent should be cause for concern.

“Unsurprisingly, all big four banks are hiking variable mortgage rates by the full 0.50 percentage points.

“As a result, existing customers with a $500,000 loan at the start of the hikes will soon be paying a total of $614 extra on their mortgage a month.

“While these rate hikes will take, in some cases, over two months to hit your bank account, try to start making the higher repayments now.

“While money is already incredibly tight for many families, stashing any spare cash in the mortgage will help.

“Unfortunately for borrowers, the rate hikes aren’t stopping here. The RBA has said there will be more increases to come, however, we are expecting the size of the hikes will slow, potentially as soon as next month,” she said.

Steps you can take to help pay the mortgage:

• Make budget cuts: print out your bank statement and get out the red pen. Turning regular purchases such as takeaway lunches and coffees into treats rather than everyday expenses can make a difference.
• Refinance your mortgage: it’s the biggest monthly expense for many families so get yourself on a better deal. Switching to a lower rate could save you hundreds of dollars each month.
• Review your other bills: Put your other bills under the microscope to see where you can save, such as your energy, phone and internet packages.
• Push for a pay rise: If you haven’t had a decent wage increase recently, now is the time to ask your boss for a pay rise.
• Ask for help early: Before you miss a mortgage repayment, call your bank to see what options you have. You can also call a financial counsellor for advice. The National Debt Helpline is: 1800 007 007.

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