Westpac has joined fellow big banks NAB and ANZ in hiking fixed rates, with increases to its lowest rates of up to 0.45 percentage points today.
The changes follow similar moves made by NAB and ANZ yesterday, which saw increases of up to 0.20 percentage points.
This takes some of the bank’s fixed rates well over 7.00%.
Westpac’s lowest fixed rates | |||
|---|---|---|---|
Old | New | Change %-pts | |
1-year | 6.44% | 6.74% | +0.30 |
2-year | 6.34% | 6.74% | +0.40 |
3-year | 6.54% | 6.94% | +0.40 |
4-year | 6.69% | 7.09% | +0.40 |
5-year | 6.69% | 7.14% | +0.45 |
Source: Canstar. Based on owner-occupier fixed-rate loans with a package. LVR requirements apply.
Westpac’s changes join a list of banks hiking fixed, with Canstar rate tracking showing a total of 13 lenders have increased their fixed terms already this month.
List of lenders that have hiked fixed rates so far in September | ||
|---|---|---|
Westpac | St George | Aussie |
NAB | Bank of Melbourne | Firstmac |
ANZ | BankSA | loans.com.au |
Macquarie | Great Southern Bank | |
ING | Queensland Country Bank | |
Why are fixed rates on the rise?
Lenders are moving to hike fixed rates as the chance of a further cash rate hike firms up.
Australia’s inflation rate has remained stubbornly high with core inflation refusing to drop in the last eight months of data as a result of global pressure from the war in the Middle East and resilient spending domestically.
RBA Governor Michele Bullock today, in her opening statement to the House of Representatives Standing Committee on Economics, acknowledged these issues, stating that inflation risks “appear to be materialising”.
The RBA has been crystal clear the Board will hike again if those upside risks materialise and with Australia’s relatively robust economy and jobs market not yet standing in the way, we could well see the cash rate rise to 4.60 per cent in 11 days’ time.
Canstar analysis shows a 0.25 percentage point rate hike in September would add $91 to the monthly repayment on a $600,000 loan at the start of this year’s hikes.
Across what would then be four rate hikes in 2026, the total increase to monthly repayments would be $364.
Impact of a further 0.25 hike on monthly repayments in September | ||
|---|---|---|
Loan size at start of hikes | Hike in Sep | Cumulative increase across 4 hikes |
$600,000 | +$91 | +$364 |
$800,000 | +$122 | +$485 |
$1 million | +$152 | +$606 |
Source: Canstar. Notes: Based on an owner-occupier paying principal and interest with 25 years remaining in Feb 2026 at the RBA avg variable rate. Assumes rate hike in Sept and banks pass it on the month after. Changes are to minimum repayments.
Fixed rates are now quickly moving in one direction
Canstar’s Data Insights Director, Sally Tindall, says, “What started as a trickle of fixed rate increases has very quickly turned into a pile-on, with three of the big four banks hiking fixed rates in the last 24 hours.
“In the case of Westpac, they’re not minor adjustments. The bank has hiked its longer term fixed rates by up to 0.45 percentage points, taking some of its fixed rates well over 7 per cent.
“Fixed rates are now clearly moving in one direction and quickly.
“Lenders are responding to pressure from wholesale funding costs and the recalibration of their expectations for the cash rate. CBA is now the only major bank still yet to hike its fixed rates this month, but if history is anything to go by, it won’t be long before it follows suit.
“For months, borrowers have overwhelmingly opted for variable rates, waiting in anticipation for the Reserve Bank to kick off a rate-cutting cycle. However, sticky inflation is driving the re-writing of economic forecasts to include at least one hike, with the prospect of cuts being pushed further away.
“RBA Governor Michele Bullock couldn’t have made it more clear in her address today that their revised trajectory for inflation is heading off course once again.
“The Board has reiterated a multitude of times that it will hike again if inflation doesn’t come down as expected. With the next meeting just 11 days away, a hike will be front and centre of the discussions and with today’s comments now on the record it's difficult to see how we could walk away with another pause.
“This doesn’t mean borrowers should necessarily rush out and lock their mortgage rate. Right now, 90 per cent of lenders’ lowest rates are variable ones and in many cases, one hike isn’t going to reverse that equation.
“That said, for anyone who needs a firm ceiling on their home loan costs, a fixed rate can provide that certainty, because what we’ve learnt over the last couple of years is that, when it comes to paying the mortgage, Australians are extremely resilient.
“This unfortunately could mean we’ll see the cash rate settle at a much higher position than we first thought.”
Big four banks’ lowest rates | ||||
|---|---|---|---|---|
CBA | Westpac | NAB | ANZ | |
1-year | 6.49% | 6.74% | 6.59% | 6.49% |
2-year | 6.34% | 6.74% | 6.49% | 6.49% |
3-year | 6.59% | 6.94% | 6.64% | 6.64% |
4-year | 6.64% | 7.09% | 6.64% | 6.64% |
5-year | 6.79% | 7.14% | 6.64% | 6.69% |
Variable | 6.09% | 5.99% | 6.09% - 6.79% | 6.25% |
Source: Canstar. Rates based on owner-occupier fixed-rate loans. LVR requirements apply.
Lowest fixed rates on Canstar | ||
|---|---|---|
Lender | Rates from | |
1-year | Police Credit Union | 5.79% |
2-year | Police Credit Union | 5.89% |
3-year | Police Bank | 5.84% |
4-year | Southern Cross Credit Union | 6.29% |
5-year | Southern Cross Credit Union | 6.29% |
Source: Canstar. Rates based on owner-occupier fixed-rate loans. LVR requirements apply.
Lowest variable rates on Canstar | |
|---|---|
Rates from | |
Pacific Mortgage Group | 5.69% |
Horizon Bank (FHB) | 5.74% |
The Mutual Bank | 5.79% |
Easy Street Financial (Refi only) | 5.79% |
Unity Bank | 5.80% |
P&N Bank | 5.83% |
Source: Canstar. Rates based on owner-occupier variable-rate loans, excludes introductory and green loans. Other eligibility conditions and LVR requirements apply.
