Westpac announces further rate hikes

Effective as of 5 October, Westpac announced 9 basis point increases on its Defence Service Home Standard and Defence Service Home Intermediate products, which apply to Defence Service Home Loans offered by the bank.

Westpac stated that its rate increases follow the Department of Veteran Affairs’ decision to increase the Defence Service Housing benchmark rate to 5.39 per cent.

Westpac’s changes are as follows:

• Defence Service Home Standard product — up by 9 basis points to 3.89 per cent
• Defence Service Home Intermediate product — up by 9 basis points to 3.89 per cent

Westpac noted that the Defence Service Home Standard rate is set at the benchmark rate less 1.50 per cent, and capped at 6.85 per cent, while the Defence Service Home Intermediate rate is capped at 4.50 per cent.

In August, Westpac increased rates on all of its variable home loan products by 14 basis points, making it the first major bank to lift rates out of cycle amid rising funding costs.

Commonwealth Bank and ANZ followed Westpac’s suit in September, lifting rates by 15 and 16 basis points, respectively.

[Related: Westpac hikes mortgage rates]