The majority of Australia’s borrowers will pay higher interest rates on their mortgage from today, as big four banks CBA, Westpac, NAB, and ANZ pass on the RBA’s latest 0.25 percentage point cash rate rate hike.
Following today’s changes, Westpac offers the most competitive variable rate among the major banks, at 6.24%.
Big four bank lowest advertised variable rates | |
|---|---|
Bank | Rate from |
CBA | 6.34% |
Westpac | 6.24% |
NAB | 6.29% - 7.04% |
ANZ | 6.50% |
Source: Canstar. Rates are for owner-occupiers paying principal and interest. LVR requirements and fees can apply.
The big four aren’t the only banks passing on the full hike. So far, over 40 lenders on the Canstar Rate Tracker have passed on the hike, including Bendigo, ING, AMP and big bank subsidiaries Bankwest, St George and Suncorp.
Monthly repayments won’t rise for at least another month
While the big four banks will start charging mortgage customers the higher interest rate from today, the extra money won’t come out of borrowers’ bank accounts for a number of weeks.
This is to give borrowers ample time to make sure they can pay the higher amount.
Of the big four:
- CBA provides a minimum of 20 days’ notice
- Westpac, NAB, and ANZ provide a minimum of 30 days.
However, the reality is, many customers won’t pay the extra money for two or three months.
What should borrowers who can’t afford the higher repayment do?
- Call your bank and ask for a “rate review”. A 10 minute phone call could bring you the relief you need.
- If it doesn’t, call your bank back to discuss your options. This could mean switching to interest-only or making part payments. If you need to go into a hardship arrangement with your bank, understand the implications of this.
- Get independent financial advice. Call the National Debt Helpline on 1800 007 007. This service will put you in touch with a financial counsellor for free who can help you decide which steps to take and in what order.
More RBA hikes could still be ahead as ANZ also increases fixed
ANZ has also raised its fixed loan rates today by up to 0.25 percentage points. This is the second time the bank has increased fixed rates in just over three weeks (see table at end).
ANZ’s increases, which follows similar moves from its big bank competitors, points to the strong possibility further RBA hikes could still lie ahead.
NAB has hiked fixed rates twice in the last three weeks, while CBA and Westpac made super-sized hikes of up to 0.48 and 0.45 respectively in this time.
The lowest big for bank fixed rate is now a highly uncompetitive 6.69% for a 1-year term from ANZ.
Big four banks’ lowest fixed rates | ||||
|---|---|---|---|---|
CBA | Westpac | NAB | ANZ | |
1-year | 6.78% | 6.74% | 6.79% | 6.69% |
2-year | 6.82% | 6.74% | 6.81% | 6.74% |
3-year | 6.89% | 6.94% | 6.92% | 6.89% |
4-year | 6.89% | 7.09% | 6.92% | 6.89% |
5-year | 6.94% | 7.14% | 6.94% | 6.94% |
Source: Canstar. Rates based on owner-occupier fixed-rate loans. LVR requirements apply.
How do the big banks compare to the lowest in the market?
While the big four banks no longer have a rate below 6 per cent, a small handful of fixed and variable rates are under this benchmark.
- 5.94% is the lowest variable rate of the lenders that have announced their post-September RBA rates.
- 6.49% is estimated to be the average variable rate for owner-occupiers once the hike filters through.
- 5.99% is the lowest fixed rate, with just two lenders still offering a fixed rate under 6%.
Canstar's Data Insights Director, Sally Tindall, says, “Millions of Australian home loan customers have had their mortgage interest rate jump up on them today, as a result of last week’s RBA rate hike.”
“While most borrowers will be able to clear the higher monthly repayment they’re about to get slugged with, for many it won’t be easy, or pretty. For some, it will mean digging into their all important buffers, just to stay afloat.
“There will also be some borrowers that realise the higher repayment is not a bar they can clear. For these borrowers it's critical to act and act soon. Call your bank and canvass your options, but make sure you get independent advice as well, to assemble a strategy to ride out the storm.
“Today’s hike means some complacent borrowers will be the unhappy owners of a mortgage rate that starts with a 7 – a figure that was unthinkable even a year ago.
“If that’s you, know this is nowhere near the norm.
“After this hike filters through, we expect the average variable rate to sit at or around 6.49 per cent, while the lowest rate will still start with a 5.
“However, these rates have a target on their bank with banks still factoring in even higher rates ahead.
“ANZ is the latest big bank to hike its fixed rates for the second time in a matter of weeks as lenders move to insulate themselves from the possibility of further hikes.
“If you’ve got a variable rate mortgage, don’t ignore these warning signs. Once you’ve checked you can clear your new monthly repayment, go back and check if you can weather another hike, because there’s a chance we could be welcoming in 2027 with a cash rate of 4.85 per cent.”
ANZ fixed rate changes effective 9 October | |||
|---|---|---|---|
Old rate | New rate | Change %-pts | |
1-year | 6.49% | 6.69% | +0.20 |
2-year | 6.49% | 6.74% | +0.25 |
3-year | 6.64% | 6.89% | +0.25 |
4-year | 6.64% | 6.89% | +0.25 |
5-year | 6.69% | 6.94% | +0.25 |
Source: Canstar. Rates for owner-occupiers. LVR requirements apply.
