CBA first bank to lift rates after RBA’s third hike since May; ANZ, Macquarie Bank. NAB and Westpac follow suit

CBA kicked off latest round of home loan rate hikes less than 24 hours after the RBA’s third increase since May. ANZ, Macquarie Bank, NAB and Westpac follow suit.

Commonwealth Bank has kicked off the latest round of rate hikes across the multi-billion banking industry, less than 24 hours after the Reserve Bank’s second jumbo 0.50 per cent rate increase and the third rise since May.

Rivals ANZ, Macquarie Bank, NAB and Westpac followed suit just hours later as homeowners and property investors brace for higher mortgage repayments, amid rising inflation.

Australia’s biggest lender CBA, led by Matt Comyn, announced on Wednesday morning that it will increase home loan variable rates by 0.50 per cent to 5.80 per cent annually.

CBA group executive of retail banking, Angus Sullivan, says it will “support our customers and have a range of tools to help them manage their repayments online, including aligning them to when and how often they are paid, along with tools to help them budget and track their spending, such as Spend Tracker in the CommBank app”.

“We understand the rapidly changing rate environment may raise questions for some of our customers and we are here to help them. We encourage our customers to message us in the CommBank app to explore different support options or to connect with a home lending specialist,” Mr Sullivan said in a brief statement on Wednesday morning.

CBA’s new home loan variable interest rates will take effect on July 15. It will also increase the rates for some savings products by 0.5 per cent annually.

ANZ was the second of the big four banks to raise its variable interest home loan rates by 0.50 per cent, effective from July 15.

The 0.50 per cent hike will increase monthly repayments by $119 on an average home loan of $450,000 for an owner occupier paying principal and interest, according to ANZ.

Maile Carnegie, ANZ Group executive Australia retail, said it will help customers struggling with the cost of living.

“We helped nearly 100,000 customers manage their home loans through the pandemic and our teams are ready to help now with a range of support options, including a free home loan check-in that can help them reorganise their loan so it continues to meet their needs.”

ANZ, led by Shayne Elliott, will also increase the rates on some savings accounts by 0.5 per cent.

Australia’s only home grown investment bank, Macquarie Bank, also increased its rates by 0.50 per cent, but will take effect on July 14.

NAB also piled in, announcing it will increase its standard variable home loan rate by 0.50 per cent from July 15. It will also increase rates by 0.50 and 2.50 per cent on two savings accounts.

From July 20, Westpac will lift home loan variable rates by 0.50 per cent. The bank will also increase the savings rate by the same amount on some accounts from July 22.

CBA has kicked off another round of rate hikes less than 24 hours after the Reserve Bank’s third rate hike since May. Picture: Bianca De Marchi/NCA NewsWire

As widely expected, the RBA, led by Philip Lowe, on Tuesday raised the official cash rate to 1.35 per cent from 0.85 per cent in a bid to curb rising inflation, as economists forecast more hikes in coming months.

Investment bank UBS expects a third 0.50 per cent rate increase in August, and for the official cash rate to peak at 2.6 per cent in November.

“Hence, rates are now further above their pre-Covid peak (0.75 per cent), and the highest level since 2019,” UBS analysts said in a research report.

Mr Lowe said global and local inflation is “high”, and warned that recent flooding will drive prices higher.

“Global factors account for much of the increase in inflation in Australia, but domestic factors are also playing a role. Strong demand, a tight labour market and capacity constraints in some sectors are contributing to the upward pressure on prices. The floods are also affecting some prices,” he said in a statement on Tuesday.

Mr Lowe again flagged more rate hikes were on the way.

“The board expects to take further steps in the process of normalising monetary conditions in Australia over the months ahead. The size and timing of future interest rate increases will be guided by the incoming data and the board’s assessment of the outlook for inflation and the labour market.

“The board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time.”

Originally published as CBA first bank to lift rates after RBA’s third hike since May; ANZ, Macquarie Bank. NAB and Westpac follow suit