Westpac was the first major bank to pass on the 50bp rate rise, amid questions about the ‘transmission mechanism’ as banks hold repayments for borrowers ahead.
will almost certainly be passed through to mortgage holders which would mean repayments on a $500,000 debt increasing by $133 a month – as banks work to restore net interest margins squeezed when rates hit rock bottom.
Westpac said its variable interest rates would also lift by 0.50 per cent for new and existing customers. None of the other major banks had announced a move by 7:30pm AEST. Westpac’s consumer and business banking chief executive Chris de Bruin said the majority of its customers “are ahead on mortgage repayments and have a buffer available to help them manage an interest rate increase.”
With less time to have repaid debt and the potential for negative equity as house prices fall, APRA boss Wayne Byres, in a speech toEvidence of rising arrearsCredit bureau Equifax said it is already starting to see arrears rise in personal loans, with the number more than 90 days overdue now at the highest point since May 2020. It says 500,000 mortgage holders also have personal loans.
Citigroup analyst Brendan Sproules said an excess of balance sheet funding means major banks have not had to chase higher rates in the term deposits market, helping to expand spreads, which is positive for bank net interest margins in the near-term.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Rates are rising but many home owners yet to feel the painBanks will hold repayments steady if customers are ahead on repayments, raising questions about the ‘transmission mechanism’ as customers’ budgets don’t change.
Read more »
Treasurer warns life will become more expensive before inflation is bought under controlJim Chalmers says a rise in interest rates is 'difficult news' for home owners and warns life in Australia is set to become even more expensive.
Read more »
‘Money was never going to be free forever’: Borrowers can withstand higher rates, says WestpacWestpac senior executive Chris de Bruin says the vast majority of mortgage customers can manage a series of interest rate rises, though the bank is watching closely for weaker discretionary spending.
Read more »
‘Money was never going to be free forever’: Borrowers can withstand higher rates, says WestpacWestpac senior executive Chris de Bruin says the vast majority of mortgage customers can manage a series of interest rate rises, though the bank is watching closely for weaker discretionary spending.
Read more »
ASX to slip, RBA decision ahead, Economists dividedRBA executes first back-to-back interest-rate increase in 12 years, warns on global outlook, Ukraine, energy price rises, AU dollar, AU 10-year bond yields rises, S&P/ASX 200 falls.
Read more »
Rate rises or recession: pick one to worry about, not bothWithin the space of a year, we’ve gone from worrying about the imminent death of elderly loved ones and the potential for skyrocketing joblessness to worrying about the spectre of rising prices. | OPINION by Jess_Irvine
Read more »