There’s no relief in sight for borrowers, with all big four banks announcing they will pass on the latest 25 basis point interest rate hike.
It comes after borrowers once again came up short after the Reserve Bank of Australia (RBA), lifted the cash rate to 3.85 per cent at this week’s meeting.
NAB was first to increase interest rates, announcing it would lift rates for both mortgage and savings customers.
Westpac, CBA and ANZ also announced interest rate increases for mortgage customers, but will only pass on the higher interest rates for select savings customers.
Westpac’s lowest variable rate will increase from 5.24 per cent to 5.49 per cent on May 16, while ANZ will lift its lowest variable rate from 5.54 per cent to 5.79 per cent on May 12.
NAB will increase its basic variable rate from 5.64 per cent to 5.89 per cent on May 12, and CBA will also lift its variable rates by 0.25 per cent on May 12.
RateCity.com.au Research Director Sally Tindall said the latest round of rate hikes would put borrowers under extreme financial pressure.
“This latest hike is likely to hit home for many borrowers over the next few months as they try to keep their budgets in the black,” Ms Tindall said.
“The majority of borrowers haven’t yet paid for their 10th RBA hike, yet now they’ve got number 11 banked up behind it, just when they thought they might get a chance to catch their breath.”
Ms Tindall said borrowers currently on variable rates need to make sure it’s competitive.
“Refinancing or even haggling with your existing lender can inject some much needed breathing space into a tight budget,” she said.
NAB was the only bank to increase its saving rates across the board, from 4.25 per cent to 4.5 per cent.
“NAB has stepped up and passed on the full hike to its Reward Saver and iSaver customers, which is encouraging to see,” Ms Tindall said.
“This move will put pressure on the other big banks to pass on full hikes to their savings customers.”
Ms Tindall said once again Westpac and ANZ are picking and choosing which savings accounts get a boost and which miss out.
“Westpac is serving up a generous 0.30 percentage point hike for its young adult savers, to take this rate to an impressive 5 per cent, yet its existing eSaver customers are still stuck in neutral on just 1.10 per cent,” she said.
“ANZ has committed to hiking the rates on just one of its three savings accounts, which is a disappointing result, particularly for those customers with a Progress Saver or an Online Saver account.”
Ms Tindall said if you’ve got your cash sitting in a savings account, don’t just assume your bank is passing on the RBA hikes in full.
“Check your rate and if it’s earning an ongoing rate of less than 4.5 per cent, then it could be time to switch,” she said.
Meanwhile, CBA announced they would increase savings rates on their NetBank Saver, Youthsaver and GoalSaver accounts.
Group Executive, Retail Banking, Angus Sullivan said CBA would extend its 12-month 4.35 per cent term deposit special.
Mr Sullivan said the combination of increasing interest rates and the rising cost of living is creating challenges for some customers and he encouraged borrowers who were struggling to reach out to the bank.
CBA also announced it would be reducing its three-year fixed rate home loan interest rate by 0.40 per cent to 5.59 per cent.
