Invest
Rate hikes: What they mean for you
The “vast majority” of borrowers are set to be stung after two more major banks increased interest rates on Thursday, following Westpac’s move last week.
Rate hikes: What they mean for you
The “vast majority” of borrowers are set to be stung after two more major banks increased interest rates on Thursday, following Westpac’s move last week.
The Commonwealth Bank (CBA) and ANZ increased interest rates for variable rate loans by 0.15 per cent and 0.16 per cent, respectively, with the hike signalling higher monthly payments for most borrowers.
NAB is the only big four bank to have avoided hiking rates so far.
“CBA and ANZ’s decision to hike rates hot on the heels of Westpac was a predicable step in what is becoming a well-worn routine. In fact, hiking on the same day means they can shoulder the backlash together,” RateCity research director Sally Tindall said.
“What this rate hike means is that the vast majority of variable rate home owners will now be shelling out more on their mortgage each month.”
Continuing, she added that while the big banks may move together, customers shouldn’t feel any loyalty.
“If you live in your own home and own at least 20 per cent of it, start shopping around – you’ll be surprised at what rates are on offer,” Ms Tindall said.
“Plenty of lenders are ready and waiting to take on your business with rates as low as 3.44 per cent.”
Graham Cooke, insights manager at Finder, agreed, adding that NAB would likely hike its rate in the coming week as well as other smaller lenders.
“Many others will be taking this opportunity to increase rates in the next few days. With funding costs rising internationally, banks will argue that they didn’t have a choice,” he said.
“Since Westpac moved interest rates north last week, it was inevitable the other big banks would follow suit. The big surprise was that it took over a week. We expect NAB to join the others by next week.”
But what does it mean for me?
For borrowers with $300,000 loans, they're looking at paying an extra $335 a year under CBA's rate change, with borrowers paying back loans of $1 million set to be set back an extra $1,117.
RateCity broke it down further:
CBA
| Loan size | Old standard
variable 5.22% |
New standard variable 5.37% |
Extra monthly repayment | Extra cost annually |
| $300,000 | $1,651 | $1,679 | $28 | $335 |
| $400,000 | $2,201 | $2,239 | $37 | $447 |
| $500,000 | $2,752 | $2,798 | $47 | $559 |
| $750,000 | $4,128 | $4,197 | $70 | $838 |
| $1,000,000 | $5,503 | $5,597 | $93 | $1,117 |
ANZ
| Loan size | Old standard
variable 5.20% |
New standard variable 5.36% |
Extra monthly repayment | Extra cost annually |
| $300,000 | $1,647 | $1,677 | $30 | $357 |
| $400,000 | $2,196 | $2,236 | $40 | $476 |
| $500,000 | $2,746 | $2,795 | $50 | $596 |
| $750,000 | $4,118 | $4,193 | $74 | $893 |
| $1,000,000 | $5,491 | $5,590 | $99 | $1,191 |
RELATED ARTICLES
Property
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young AustraliansRead more
Property
AFG Securities waives settlement fees for first-home buyers, signalling strategic shift
In a strategic move aimed at easing the financial burden on first-home buyers, AFG Securities has announced the elimination of settlement fees on select loans, potentially saving customers up to $699Read more
Property
From trust woes to wealth: Australian agencies' secret to boosting prices
In Australia’s residential market, trust is no longer a nice-to-have—it’s a pricing variable. Persistent distrust of real estate agents is depressing vendor outcomes and inviting regulatory heat, but ...Read more
Property
Reality check for first home buyers: Affordable suburbs with 5% deposit
In a significant development for Australian first home buyers, a new property search tool from Aussie Home Loans is set to transform the way prospective homeowners approach the market. As the Federal ...Read more
Property
Trust as a performance multiplier in Australia's real estate market
In Australia’s A$10–11 trillion housing market, trust is emerging as a crucial factor that sellers and agencies can no longer afford to overlook. Traditionally viewed as a soft metric, trust is now ...Read more
Property
LJ Hooker Lake Macquarie makes a splash with Belmont buy as real estate consolidation looms
LJ Hooker Lake Macquarie’s acquisition of the Belmont office, including its rent roll, is less about shopfronts and more about balance‑sheet resilience. In a market where listings ebb and flow with ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young AustraliansRead more
Property
AFG Securities waives settlement fees for first-home buyers, signalling strategic shift
In a strategic move aimed at easing the financial burden on first-home buyers, AFG Securities has announced the elimination of settlement fees on select loans, potentially saving customers up to $699Read more
Property
From trust woes to wealth: Australian agencies' secret to boosting prices
In Australia’s residential market, trust is no longer a nice-to-have—it’s a pricing variable. Persistent distrust of real estate agents is depressing vendor outcomes and inviting regulatory heat, but ...Read more
Property
Reality check for first home buyers: Affordable suburbs with 5% deposit
In a significant development for Australian first home buyers, a new property search tool from Aussie Home Loans is set to transform the way prospective homeowners approach the market. As the Federal ...Read more
Property
Trust as a performance multiplier in Australia's real estate market
In Australia’s A$10–11 trillion housing market, trust is emerging as a crucial factor that sellers and agencies can no longer afford to overlook. Traditionally viewed as a soft metric, trust is now ...Read more
Property
LJ Hooker Lake Macquarie makes a splash with Belmont buy as real estate consolidation looms
LJ Hooker Lake Macquarie’s acquisition of the Belmont office, including its rent roll, is less about shopfronts and more about balance‑sheet resilience. In a market where listings ebb and flow with ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
