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Westpac and NAB the next big banks to hike fixed + Westpac hikes new customer variable rates

Eden Radford avatar
Eden Radford
- 5 min read
Westpac and NAB the next big banks to hike fixed + Westpac hikes new customer variable rates

Westpac and NAB – Australia’s second and third largest lenders – have both today hiked the majority of their fixed rates for both owner-occupiers and investors, in some cases by up to 0.25 percentage points.Westpac has also increased its lowest variable rate for new customers, in addition to the bank’s RBA November rate rise on Tuesday.

These increases from Westpac and NAB do not affect existing customers, unless they opt to move to a fixed rate.

Westpac’s changes today

The rate on Westpac’s basic variable mortgage – the Flexi First Option Home Loan – has increased by 0.10 percentage points.

The hike applies to owner-occupiers paying principal and interest, and investors paying both principal and interest and interest-only.

As a result, the bank’s lowest variable rate is now 6.44 per cent, however, this is an introductory rate for 2 years, after which time it rises by 0.40 percentage points. The introductory deal is a variable rate. It can, and typically does, also rise with the cash rate.

Westpac’s change to its basic variable rate, effective today

For owner-occupiers paying principal & interest

Old rateNew rateChange
6.34%, then +0.40% pts after 2 yrs6.44%, then +0.40% pts after 2 yrs+0.10%

Source: RateCity.com.au. Note: LVR requirements apply.

Westpac has also hiked fixed rates across the majority of loan terms for both owner-occupiers and investors paying both principal and interest and interest-only.

The biggest increase in today’s changes from Westpac is 0.20 percentage points.

Westpac’s lowest fixed rates: today’s changes

For owner-occupiers paying principal and interest – contact us for other loan types

Loan termOld rateNew rateChange
1-yr6.49%6.59%0.10%
2-yr6.39%6.49%0.10%
3-yr6.39%6.59%0.20%
4-yr6.39%6.59%0.20%
5-yr6.69%6.69%No change

Source: RateCity.com.au. Note: above rates are on a package loan with an annual fee of $395. LVR requirements apply.

NAB’s changes today

NAB, Australia’s third largest mortgage lender, has increased fixed rates today by up to 0.25 percentage points for both owner-occupiers and investors.

NAB’s lowest fixed rates: today’s changes

For owner-occupiers paying principal & interest – contact us for other loan types

Loan termOld rateNew rateChange
1-yr6.59%6.69%0.10%
2-yr6.34%6.59%0.25%
3-yr6.39%6.59%0.20%
4-yr6.69%6.74%0.05%
5-yr6.69%6.79%0.10%

Source: RateCity.com.au. Note: LVR requirements apply.

Fixed rate market flooded with hikes

RateCity.com.au research shows that over the last month, 60 lenders have increased at least one of their fixed rate loans, including moves from CBA, Adelaide Bank, AMP, ING and Macquarie Bank.

Cuts vs hikes: fixed rates over the last month

Loan termLenders that have cutLenders that have hiked
1-yr351
2-yr354
3-yr453
4-yr032
5-yr140

Source: RateCity.com.au

RateCity.com.au research director, Sally Tindall, said: “Today’s fixed rate hikes from Westpac and NAB are a definitive move from both banks to protect their margins in the face of an uncertain economic outlook.”

“The home loan market has been flooded with hikes over the last month, as banks move their fixed rates to higher ground,” she said.

“With another cash rate hike potentially still on the cards, and a growing expectation that the cost of funding will remain high well into 2024, banks are racing each other to increase fixed rates.

“The RateCity.com.au database shows that in the last month alone, a total of 60 lenders have hiked at least one fixed rate – that’s around half the market.

“This is likely to be a safety-first strategy from the banks. The last thing they want is to get caught out under-pricing their fixed rate loans.

“With just a slither of borrowers opting for a fixed rate right now, this strategy isn’t going to rock the boat, because there’s next to no-one in it.

“Westpac has also increased the rate on its basic variable home loan by up to 0.10 percentage points, in addition to the bank’s recent 0.25 percentage point rise on the back of the November cash rate decision. That said, today’s additional increase is only for new customers taking out a Flexi First mortgage.

“As a result, Westpac and ANZ now have the equal lowest advertised variable rate out of the big four banks, however, Westpac’s is only a honeymoon rate that rises an additional 0.40 percentage points after two years.

“While this might make ANZ the clear winner out of the big four banks’ lowest variable rates, it’s not even in cooee of the market leaders, a handful of which are still offering rates under 6 per cent following their November RBA increases” she said.

Big four banks’ lowest advertised fixed rates

Loan termCBAWestpacNABANZ
1-yr6.59%6.59%6.69%6.69%
2-yr6.84%6.49%6.59%6.54%
3-yr6.59%6.59%6.59%6.59%
4-yr6.69%6.59%6.74%6.74%
5-yr6.69%6.69%6.79%6.84%
Lowest variable6.49%6.44% for 2 years then +0.40%6.84%6.44%

Source: RateCity.com.au

Lowest fixed rates on RateCity.com.au database

TermRateLender
1-yr5.50%Abal Bank
2-yr5.63%Australian Mutual
3-yr5.48%Australian Mutual
4-yr5.90%Up Bank
5-yr5.54%RACQ

Source: RateCity.com.au

Compare home loans in Australia

Product database updated 21 Jul, 2024

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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