The big four bank revealed its decision not long after National Australia Bank (NAB) unveiled similar rate hikes.
Westpac will increase the variable home loan rate for owner occupiers by:
- 3 basis points to 5.32% p.a.* for customers with principal and interest (P&I) repayments
- 8 basis points to 5.49% p.a.* for customers with interest only (IO) repayments
For investment home loans, Westpac will increase variable interest rates by:
- 24 basis points to 5.79% p.a.* for customers with P&I repayments
- 28 basis points to 5.96% p.a.* for customers with IO repayments
As a special offer, Westpac is allowing IO home loan customers to switch to P&I repayments before June 17 without paying a switching fee.
— 9Finance (@9Finance) March 17, 2017
Both NAB’s and Westpac’s announcements come after the US Federal Reserve made the decision last week to raise interest rates by 25 basis points for the second time in three months.
Meanwhile, the Reserve Bank of Australia (RBA) kept the cash rate on hold this month for the sixth time in a row.
George Frazis, Chief Executive of Westpac Consumer Bank, said the decision took a number of economic and regulatory factors into account.
“Today’s changes are in response to increasing funding costs,” Frazis said.
“Despite home loan interest rates being at historically low levels, both deposits and wholesale funding of mortgages have increased over the last nine months.
“We understand the significance of interest rate changes to our home loan customers, so we take a very careful approach to these decisions.
“We try to balance the needs of both owner occupiers and investors in making these decisions, while continuing to provide customers with a competitive offering across our range of products.
“Importantly, we are offering lower interest rates to customers who make principal payments, to encourage customers to pay down their home loan in this low interest rate environment.”
Albanese: “No excuse” for interest rate rises
When asked on The Today Show about NAB’s decision to raise interest rates, Labor MP Anthony Albanese said there’s no excuse for interest rate rises when the Reserve Bank of Australia haven’t moved.
“They’re using the US increases as an excuse and I think it’s just another example of the banks being out of touch,” Albanese said.
Pyne: Move banks if you don’t like it
During the same segment in The Today Show, Liberal MP Christopher Pyne encouraged bank customers to move banks if they don’t like what their bank is doing.
“There are lots of other lenders in terms of the housing market,” Pyne said.
“It’s not nearly as hard to move banks as people think it is. I’ve done it a couple of times and it’s not that difficult.”
— The Today Show (@TheTodayShow) March 16, 2017
At the time of writing, this is a snapshot of the Home Loan Interest rates on Canstar’s database:
|Table: Residential Home Loan Market – Snapshot of the current market (20/03/2017)|
|Stat||Standard Variable||1 Year Fixed||2 Year Fixed||3 Year Fixed||4 Year Fixed||5 Year Fixed|
The search results do not include all home loan providers, and may not include all features relevant to you. Loans based on loan amount of $300,000 and available for principal and interest repayments.
*Only advertised rates listed. Comparison rates not supplied by Westpac.