Australia’s ‘big four’ banks respond to RBA’s interest rate rise

Australia’s major banks have now responded to the RBA’s interest rate rise, but their dates for passing on the 0.5 per cent hike vary. See when you’ll get hit in the hip pocket.

All four of Australia’s major banks have now responded to the Reserve Bank of Australia’s 0.5 per cent interests rate rise.

The RBA hiked the cash rate by 50 basis points on Tuesday, bringing the cash rate to 1.85 per cent.

Macquarie Bank, which is the nation’s fifth largest lender, was the first bank to lift its variable rates just hours after the announcement.

This was closely followed by UBank – a division of NAB – whose customers will cop the rise in September.

On Thursday, the Commonwealth Bank of Australia (CBA) was the first major bank to react to the rise, closely followed by ANZ, Westpac and NAB.

For CBA customers, this will bring the owner occupier principal and interest standard variable home loans rate to 5.8 per cent and the investor rate to 6.38 per cent from August 12.

Those with term deposits will feel the pinch a bit earlier from August 8.

The CBA is the first of the ‘big four’ banks to react to the rate rise. Picture: NCA NewsWire / Luis Enrique Ascui

ANZ will also be passing on the full rate hike on variable home loans from August 12.

From next week, interest rates will jump 0.5 per cent for customers with an ANZ Plus Save account and a balance of less than $250,000.

Smaller institutions, including online home loan provider Athena and Dutch multinational bank ING, have also declared it will pass on the entire rate hike onto customers.

In a win for customers, NAB has passed on the rate rise to two of its primary savings accounts, along with ING, whose Savings Maximiser will now sit at 3.10 per cent from next Tuesday.

Gaurav and Kanika Bakshi Thind, with their children, Sara, 8, and Ayra, 13 months, at Quakers Hill. The family are waiting for their home to be built, which they bought before the rate hike. Picture: Justin Lloyd.

It comes after the big four banks revealed they plan to shut 37 bank branches across the nation in the next three months.

The new unprecedented rise, which was the fourth official interest rate increase in under 100 days, means repayments on a $1m loan will be nearly $1000 a month higher than they were in April.

The RBA’s decision to elevate the cash rate to a level not seen since April 2016 came as it faced more criticism over its handling of ­monetary policy, including from recent homebuyers and those who would like to buy a place of their own.

New mums Pillis Castro and Valentina Londono said they were worried the most recent rate rise would make their goal of owning a home in Sydney an impossible dream.

L-R: Pilis Castro with daughter Celeste and Valentina Londono with daughter Antonella in Hyde Park, Sydney.

“We are nervous,” Ms Castro said.

“We don’t know if we are going to be able to do it.”

Jason Falinski, who was chairman of the House of Representatives Standing Committee of Economics until the May federal election, told The Daily Telegraph it took RBA Governor Philip Lowe too long to abandon guidance that the cash rate was “very likely” to stay at 0.1 per cent until 2024.

“I think the biggest and fairest criticism is that as of February this year, he was telling the public that they would not be seeing interest rates increases until 2024 and then he conceded under a barrage of questions (from our committee) that maybe (there would be an increase) in 2023, but only at the very end,” Mr Falinski said.

“Three months later he was ­increasing interest rates. There would have been a lot of people making decisions about ­investing in houses, shares and businesses that would have relied on that forward guidance.”