CBA first of big four to pass on RBA’s rate hike in full to mortgage customers

The big four banks have all passed on the Reserve Bank’s latest interest rate hike to home loan borrowers but not all savings account customers are happy.

Australia’s largest bank, Commonwealth Bank, was the first of the big four to pass on the Reserve Bank’s latest rate hike in full and now ANZ, Westpac and NAB have done the same.

CBA announced on Thursday morning it would pass on the 50 basis points in full to homeowners, bringing its occupier principal and interest standard variable home loans rate to 5.8 per cent.

The investor rate will rise to 6.38 per cent, effective from August 12.

But CBA has also thrown an olive branch to savers, lifting the interest rate on its NetBank Saver account by 0.5 per cent per annum to 0.85 per cent.

Its five-month introductory variable rate on the same account will lift by 0.5 per cent to 1.8 per cent.

The 0.5 percentage point hike means an average owner-occupier with $500,000 debt and 25 years remaining will see their monthly repayments rise by $140.

By midday ANZ said it would too increase all variable interest rates for its Australian home loans by 0.50 per cent from Friday August 12.

ANZ will also increase the rate on ANZ Plus Save account balances of less than $250,000 by 0.50 per cent to 2.50 per cent, it said.

Westpac has become the third big four bank to move with variable home loan rates to rise by 0.5 per cent from August 18. Its Westpac Life total variable rate with bonus interest will increase by 0.5 per cent to 1.85 per cent and the eSaver standard variable rate will rise by 0.55 per cent to 0.85 per cent.

NAB announced on Thursday afternoon that its standard variable home loan interest rate will increase by 0.5 per cent per annum, effective from 12 August.

It has also lifted its rates on a range of savings accounts, effective 12 August. NAB’s iSaver will increase by 0.50 per cent to 1.80 per cent; its Reward Saver bonus rate will increase by 0.50 per cent to 1.75 per cent and its 12-month term deposit will increase 0.50 per cent to 3.00 per cent.

Announcing the move on Thursday morning, CBA head of retail banking Angus Sullivan said CBA wanted to support customers where it could.

“That includes increasing select deposit rates so they can achieve a better return on their savings and manage any pressures to their family budget associated with cost of living,” Mr Sullivan said.

Online home loan provider Athena and Tasmanian bank MyState also announced they will pass on the RBA’s latest hike in full.

The RBA’s decision on Tuesday is just now flowing through to customers.

Since May, the cash rate has risen by 1.75 percentage points, after four months of back-to-back increases by the central bank.

Ratecity.com.au research director Sally Tindall said it was good NAB had “stepped up to the plate” and passed on full hikes to its two main savings accounts.

“This is fantastic news for these customers who have been earning next to nothing on their savings for years,” she said.

“ING has also announced it’s passing on the full hike to its Savings Maximiser account, taking this rate to a total of 3.10 per cent. When it comes into effect next Tuesday, it will be the highest ongoing savings rate for all adults.

“We’ve finally broken the 3 per cent barrier, which will be a great feeling for thousands of keen savers who diligently shop around for the best rates.”

But she said CBA and ANZ needed to take their official announcements back to the boardroom and start thinking about what they could do to help all of their savings customers.

“Even after these hikes filter through, many savings customers will still be on rates that are well below the cash rate,” she said.

“If your bank isn’t offering an ongoing savings rate of at least 2 per cent, then take your nest egg shopping for one that does,” she said.

Originally published as CBA first of big four to pass on RBA’s rate hike in full to mortgage customers