The major banks’ home loan customers with variable interest rates will feel the full sting of this week’s official rate rise.
The major banks’ home loan customers with variable interest rates will feel the full sting of this week’s official rate rise after the big four announced 0.5 percentage point increases in mortgage rates, alongside rises in some savings accounts., Commonwealth Bank was the first to move of the majors on Thursday, saying it would raise variable home loan rates by 0.5 percentage points, the same margin as the central bank’s move.
CBA said it would increase rates on its NetBank saver product by 0.5 percentage points to 0.85 per cent. Meanwhile, Westpac announced various changes that included rate increases on its two biggest deposit accounts: it will increase rates on its eSaver account by 0.55 percentage points to 0.85 per cent, and it increased a bonus interest rate on its Life product.
Since the RBA began raising interest rates in May, banks’ home loan rates have risen by far more than their rates on deposits, a dynamic that is boosting bank profits whileCBA, the bellwether for the sector, will report its full-year results next week, and Morgan Stanley analysts expect the nation’s largest lender is likely to have received a $250 million boost to net interest income from rising interest rates and bond yields.
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