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Westpac hikes variable mortgages and all key savings accounts

Westpac hikes variable mortgages and all key savings accounts

Westpac has today announced it will hike variable rate mortgages by 0.50 percentage points for new and existing customers.

However, unlike its competitors, the bank has hiked rates on all key savings accounts, in some cases by over half a percentage point.

Home loans

From 18 August, Westpac variable home loan rates will go up by 0.50 percentage points.

Like CBA, Westpac has also announced it will cut its lowest 4-year fixed rate to 4.99 per cent on 9 August 2022. This rate will be for owner-occupiers paying principal and interest on a package rate ($395 annual fee).

Westpac variable rate changes for owner-occupiers – effective 18 August

Old rateNew rateIncrease in repayments, $500K
Standard variable5.73%6.23%$152
Discounted variable4.44%4.94%$143
Lowest variable3.14% for 2 yrs then 3.54%3.64% for 2 yrs then 4.04%$133

Source: RateCity.com.au. Repayments are for an owner-occupier paying principal and interest with a $500,000 loan over 25 years. New rates effective 18 August 2022.

What is Westpac doing for savers?

Westpac has announced it will hike its Life and Spend&Save accounts by 0.50 percentage points, while the ongoing rate on its eSaver account will increase by 0.55 percentage points from 18 August.

The bank will also offer a 12- to 23-month term deposit of 3.00 per cent from Monday (8 August).

The bank has not announced hikes to its Bump savings account for people aged under 18 at this stage.

Westpac savings changes – effective 18 August

Old max rateNew max rateChange
Life

1.35%

1.85%

+0.50%

Spend&Save (ages 18-29)

2.75%

3.25%

+0.50%

eSaver

1.25% for 5 mths then 0.30%

1.80% for 5 mths then 0.85%

+0.55%

Bump (ages under 18)

1.20%

N/A

No change

Source: RateCity.com.au. Note: conditions and balance caps apply for maximum rate on select accounts.

RateCity.com.au research director, Sally Tindall, said: “Westpac might be playing follow the leader when it comes to mortgages, but it’s breaking ranks on savings by hiking on most accounts.”

“This is a win for Westpac’s savings customers who are now starting to see decent hikes flow through to their hard-earned cash,” she said.

“At this stage, only the bank’s Bump account for people aged under 18 years is still under review.

“Westpac’s decision will put pressure on CBA and ANZ to hike rates on the popular savings accounts they left out of their official rate announcements.

“At 3.25 per cent, Westpac’s Spend&Save account will soon offer the highest ongoing savings rate for young adults, although current market leader, BOQ, could still trump this in what has become an increasingly sought-after customer base.

“Westpac home loan customers will be disappointed at today’s decision by the bank to hike variable rates across the board, however, the move is not unexpected.

“While we might be more than halfway through the RBA rate rises, borrowers should still prepare themselves for at least another 1.5 percentage points of hikes over the next six months.

“Customers on a variable rate should sit down and work out what their mortgage repayments will look like if the cash rate rises to 3.35 per cent, as forecast by ANZ and Westpac.

“If you look at the numbers and they just don’t add up, pick up the phone and call for help early, before you default on your loan,” she said.

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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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