Westpac raises variable rates

Westpac has joined the rest of the big four banks in passing the Reserve Bank’s latest rate rise on to customers.

Both new and existing Westpac mortgage customers will see their variable interest rates rise by 0.25% per annum, The Australian reported.

The hike matches the 0.25% interest rate rise put into effect by the RBA earlier this month.

“In making these decisions, we consider multiple factors including the need to manage pricing changes in a sustainable way,” Westpac said in an email to customers. “These changes reflect the continued increase in funding costs.”

There was an upside for the bank’s deposit customers, who will get a boost to their savings thanks to the rate hike. Eligible customers between 18 and 29 will see a 0.25% increase in their savings interest rate to 3.75% per annum. Customers with Westpac Life will see an increase to 2.6%, while the eSaver variable rate will rise to 2.55%, The Australian reported.

Westpac is the last of the big four banks to implement the rate hike. Increased rates took effect for customers of Commonwealth Bank, NAB and ANZ on Oct. 14, The Australian reported. All four banks passed on the RBA’s rate hike in full.

Last month, RBA Governor Phillip Lowe admitted that rising interest rates were causing households to feel the pinch, but insisted the rate hikes were necessary to battle soaring inflation.

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“I know that higher interest rates are unwelcome for many people, especially those who have borrowed large sums over recent times,” Lowe told a parliamentary committee. “The alternative, though, of allowing higher inflation to become entrenched would be even more difficult, and it would damage our economic prospects.”

Chris de Bruin, Westpac’s chief executive of consumer banking, said the rate increases have not resulted in a rise in customers experiencing financial difficulty.

“The majority of our borrowers remain in good shape, with more than two thirds ahead of mortgage repayments and no material change in customers seeking financial support at this time,” he told The Australian. “We’re continuing to monitor the situation and bolster our customer support teams so we can help customers navigate the evolving rate cycle.”