Increase to apply to new borrowers first
In addition to two of the big four banks, Auswide Bank has announced its variable home loan rates are going up.
Following the 0.25% hike to the official cash rate on Tuesday, now 3.35%, ANZ and NAB announced they would pass on the increase to variable rate borrowers in full.
Announcing the rate increase on Tuesday evening, Auswide Bank said that the 25-basis point rise on its variable home, business and personal loans would take effect from February 14.
The interest rates on any new variable rate home loans lodged from February 8 (Wednesday) would include the 0.25% increase, it said. An Auswide bank spokesperson confirmed that the new variable rates would therefore take effect for new business immediately, while its existing customers would receive notice of the increase.
Auswide managing director Martin Barrett (pictured above) said the 25-basis point rise announced on Tuesday was widely anticipated - although he said there were some forecasts that the percentage rise would be higher.
“In their commentary [on Tuesday], the RBA did indicate there were more rate rises ahead. However, inflation is expected to ease over the course of 2023 with market commentators predicting the RBA may slow the rate tightening cycle which is good news for borrowers,” Barrett said.
Barrett said Auswide Bank customer service teams were available to support customers in response to the increases, and that the majority of the bank’s customers continued to meet their scheduled loan repayments.
Customers whose loan repayments were due to increase would be advised by letter before their next repayment due date, Barrett said. Their applicable interest rate would also appear on their next loan statement, he said.
Following the 25-basis point official cash rate hike on Tuesday afternoon, ANZ was the first major bank to move, announcing interest rates for its variable home loans would increase by 0.25% effective February 17.
The big four bank announced the rate available to its savings customers on the ANZ Plus Save account (for balances less than $250,000) would also increase by 0.25%, to 4%, effective February 14.
Later Tuesday evening, NAB announced that its standard variable home loan interest rate would increase by 0.25%, effective February 17.
NAB group executive personal banking Rachel Slade said the bank acknowledged the RBA’s actions to bring inflation under control, but recognised some Australians would find this challenging.
“I encourage anyone who is worried about their situation to reach out to their bank,” Slade said.
“What we do know is that people are more engaged with their finances than they’ve been in a long time and that they are making their own adjustments to spend more ‘thoughtfully’ on non-essential purchases.”
For new owner-occupier loans lodged from February 8 (principal and interest, LVR less than or equal to 75%), Auswide Bank’s basic variable rate is 4.90%.
