Commonwealth Bank lifts variable interest rate 0.25 per cent
Australia’s biggest bank is the last of the Big Four to slug Aussie homeowners with another lift in interest rates. Here’s how much you’ll pay.
Australia’s biggest bank has hit Australian homeowners with an interest rate increase, the last of the Big Four to follow the Reserve Bank of Australia’s Melbourne Cup hike on Tuesday.
Commonwealth Bank will increase its variable home loan rates by 0.25 per cent per annum from November 17, the bank said on Thursday.
Before the increase, CommBank’s lowest variable rate for new customers was 6.34 per cent.
All of the Big Four – the Commonwealth, NAB, Westpac and ANZ – have now passed on the RBA’s decision to hike its cash rate to 4.35 per cent on Tuesday.
After the increases, NAB now has the highest basic variable rate, according to RateCity, at 6.84 per cent.
CommBank is pegged at 6.59 per cent while Westpac offers 6.34 per cent for two years and then increases by 0.4 per cent.
ANZ offers the lowest rate at 6.44 per cent.
ANZ expects the change will increase monthly repayments by $70 on a variable home loan of $450,000 for an owner occupier paying principal and interest.
CommBank retail banking group executive Angus Sullivan asked customers to message the bank via the CommBank app if they needed support.
“Customers who are struggling are top of mind for us and helping customers when they need it is our priority,” he said.
“We encourage customers to message us in the CommBank app as soon as possible if they need support.
“We have added functionality for customers to chat online with us to explore their options, which some customers feel more comfortable doing than talking on the phone.”
RateCity research director Sally Tindall said customers still had some time to get their finances in order before the hike was passed on.
“Westpac, NAB and ANZ mortgage customers have around two weeks before they get hit with higher rates, however, banks typically take a couple of months before they debit this extra money out of customers’ accounts,” she said.
“If your budget is tight, use this time to work out a way to inject relief into your finances so you can clear this extra cost. If you can’t, call your bank immediately for help.”
NAB personal banking executive Rachel Slade encouraged customers concerned about their finances after the increase to “reach out” to the bank.
“While most of our customers are in good shape, there may be some people who are more concerned about the first rate rise since mid-year which is why it’s crucial to reach out to your bank as soon as you can,” she said.
The big banks aren’t the only ones increasing their rates, with ME Bank, Bank of Queensland and Virgin Money among the smaller lenders announcing increases for variable mortgage customers.
The Reserve Bank has moved sharply to tame a surge in inflation following supply shocks from the Covid shutdown and the breakout of war in Ukraine.
It raised the cash rate from 0.1 per cent in April 2022 to 4.1 per cent in June 2023, and on Tuesday, RBA governor Michelle Bullock announced a 25 basis point hike to 4.35 per cent.
The RBA cash rate serves as a benchmark for interest rates in the economy, with banks generally quick to raise mortgage rates as a result.
“Inflation in Australia has passed its peak but is still too high and is proving more persistent than expected a few months ago,” Ms Bullock said on Tuesday.
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