Lenders across Australia are lifting the variable interest rates on their home loan products after the Reserve Bank’s decision last week to raise the official cash rate for the third consecutive time.
Each of the four major banks followed the RBA’s OCR move on Wednesday by increasing their interest rate by 0.50%.
On Friday, Bendigo and Adelaide Bank announced changes to the pricing of its home loan and savings products.
For Bendigo and Adelaide Bank home loan customers on a variable rate loan, their interest rate will increase by 0.50% as of July 15.
The bank will also increase the interest rate on many of its deposit products including an increase to the rate on its Reward Saver account by 0.60% pa from July 27.
Read more: Big four lift interest rates
Bendigo and Adelaide Bank chief customer officer for consumer banking Richard Fennell (pictured above left) said the bank carefully considered the impact the rate rises could have on borrowers and savers alike.
“We recognise that savers have been doing it tough and hope this increase with the cash rate for our Reward Saver customers is good news for those seeking a better return on their savings,” Fennell said.
“We know every customer’s circumstances are different. Customers who are interested in better understanding how the change affects them can use our online calculators and tools w. they can calculate the impact of a rate rise, prepare a family budget and more.”
Bankwest announced changes to some of its home loan and select savings product interest rates on Wednesday.
The bank said the changes included an increase to its standard variable rate for home loans of 0.50% new and existing customers.
Bankwest will also increase the standard variable interest rate for select savings products including an increase to its Easy Saver product by 0.50% to 1.35% for balances up to $50,000.
Read more: Reserve Bank lifts cash rate again
“Both home loan and select savings interest rate changes are effective July 15, 2022, at which point they will be reflected on the Bankwest website,” said Bankwest executive general manager Jason Chan (pictured above second from left).
“We appreciate and understand rising interest rates might cause difficulties for some of our customers and we are . to support them during this time,” he said.
“With the potential for challenging economic conditions to continue for the foreseeable future, we will be actively reaching out to customers with options and solutions to support their financial wellbeing over the months ahead.”
AMP Bank announced on Friday a 0.50% increase to its interest rates for its home loan, savings and deposit customers, effective July 15.
The bank said to help its customers reach their savings goals, the deposit bonus interest rate for the AMP Saver Account would increase from 1.25% pa to 2.00% pa effective 1 August.
AMP Bank group executive Sean O’Malley (pictured above second from right) said in making its decision the bank considered various factors including the change in the official cash rate, the impact on customer and the need to manage a balanced portfolio.
“Our decision on interest rates is made with careful consideration, being conscious of the impact that increasing home loan rates has on homeowners and their household budgets,” O’Malley said.
“With the majority of AMP Bank’s home loan customers ahead on their repayments, they are well positioned to manage rising interest rates. We’re focused on helping customers understand what the increasing interest rate environment means for their mortgage repayments and household budgets.”
O’Malley said through AMP Banks partnership with Good Shepherd, it could refer any customer who would benefit from specialised financial wellbeing support.
“The increased bonus interest rate for the AMP Saver Account makes it a market-competitive product for customers to help them achieve their long-term savings goals,” he said.
“AMP Bank remains focused on providing competitive rates for both our home loan customers and savers to help them achieve their investment goals.”
On Thursday, Newcastle Permanent announced it would increase interest rates on its variable loans and a number of its savings products.
The bank’s variable home loan rates and business loan rates will increase by 0.50% and will take effect on July 15.
Rates will also be increased on a number of deposit products including an increase of 0.90% on selected term deposit offers.
Newcastle Permanent CEO Bernadette Inglis (pictured above right) said the decision was made after reviewing the customer-owned organisation’s interest rates and the broader market.
“A third rate increase in as many months is obviously a challenging proposition for our borrowing customers but it’s an action that the Reserve Bank has undertaken to manage inflation,” Inglis said.
“Passing the increase on to our 45,000 home loan customers is not a decision we make lightly but one that is necessary in order to maintain a competitive position in the marketplace, while ensuring we offer the best possible outcome for all 330,000 of our customers.”
Inglis also announced an increase to interest rates across a range of its deposit products including its Smart Saver Account, Special Monthly Interest Account and term deposit offers with an increase of 0.90% on selected term deposit offers.
“Combined, these changes will see more than 85,000 of our loyal customers experience an improved return on their funds. “Newcastle Permanent started as a better way for our customers to achieve home ownership and almost 120 years later, this remains absolutely central to our ethos.”
So far, the list of lenders who have announced they are passing on the rate hike in full to customers includes:
- abal banking
- AMP Bank
- Bank of Queensland
- Bank First
- Bank of Melbourne
- Illawarra Credit Union
- MyState Bank
- ME Bank
- Newcastle Permanent
- Virgin Money