Powered by MOMENTUM MEDIA
subscribe to our newsletter

More banks will raise rates: survey

An overwhelming majority of Australian economists expect more banks to increase their variable home loan rates over the coming months.

The finder.com.au Reserve Bank Survey of 30 leading economists and experts found that 71 percent of experts predict that the increase of variable home loan interest rates out of cycle – kick-started by Westpac earlier this month – would continue across the sector.

The survey highlighted that in addition to the big four jumping on board, St George and Macquarie Bank have also increased their variable rates.

Finder.com.au’s Michelle Hutchison said some lenders have a tendency to keep their rate rises quiet, which can make it difficult for Australians to keep track of movements in the home loan market.

“It’s important for borrowers to ask the question when they are speaking to lenders or applying for a new loan to find out if they have recently made any announcements or are planning to,” Ms Hutchison said. “It’s safe to assume that more lenders will follow these banks’ leads by raising their rates too.”

Advertisement
Advertisement

“Based on a $300,000 mortgage and the current average variable owner-occupied home loan rate of 5.10 percent, a rate rise of 0.18 percentage points (the average rate rise of the six lenders who’ve announced rate rises thus far) will amount to an extra $33 per month for borrowers, or potentially $396 per year or $11,880 over 30 years.”

Ms Hutchison said the big banks have set the benchmark for what the market will do. Five out of six lenders moved on the same day as Westpac, with their new increased rates to become effective on 20 November.

“However, some smaller lenders may use this opportunity to win over new borrowers, by not following the big banks’ lead at all, or not raising their rates by as much as the market average,” she said.

“Regardless, it’s a great time to compare rates to see if you can get a better deal – a small change to your interest rate can save you thousands of dollars over the life of your loan.”

More banks will raise rates: survey

PROMOTED CONTENT


>The finder.com.au Reserve Bank Survey of 30 leading economists and experts found that 71 percent of experts predict that the increase of variable home loan interest rates out of cycle – kick-started by Westpac earlier this month – would continue across the sector.

The survey highlighted that in addition to the big four jumping on board, St George and Macquarie Bank have also increased their variable rates.

Finder.com.au’s Michelle Hutchison said some lenders have a tendency to keep their rate rises quiet, which can make it difficult for Australians to keep track of movements in the home loan market.

“It’s important for borrowers to ask the question when they are speaking to lenders or applying for a new loan to find out if they have recently made any announcements or are planning to,” Ms Hutchison said. “It’s safe to assume that more lenders will follow these banks’ leads by raising their rates too.”

“Based on a $300,000 mortgage and the current average variable owner-occupied home loan rate of 5.10 percent, a rate rise of 0.18 percentage points (the average rate rise of the six lenders who’ve announced rate rises thus far) will amount to an extra $33 per month for borrowers, or potentially $396 per year or $11,880 over 30 years.”

Ms Hutchison said the big banks have set the benchmark for what the market will do. Five out of six lenders moved on the same day as Westpac, with their new increased rates to become effective on 20 November.

“However, some smaller lenders may use this opportunity to win over new borrowers, by not following the big banks’ lead at all, or not raising their rates by as much as the market average,” she said.

“Regardless, it’s a great time to compare rates to see if you can get a better deal – a small change to your interest rate can save you thousands of dollars over the life of your loan.”

More banks will raise rates: survey
mortgagebusiness

Latest News

A high rate of loan repayments through the pandemic has somewhat slowed the growth of Heritage Bank’s book, despite a surge in approvals. ...

Small and medium-sized enterprises were the most commonly targeted victims of cyber attacks in the last financial year, according to new rep...

An overwhelming majority of Pulse Credit Union members have supported the proposed deal with Teachers Mutual Bank Ltd, with the two companie...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.