Westpac customers will be feeling the pinch of newly increased rates after the bank moved to pass on the interest rate hikes to customers.
Both new and existing customers will see their home loan variable interest rates rise by 0.25 per cent per annum.
The increase matches the 0.25 per cent interest rate hike implemented by the Reserve Bank of Australia earlier this month.
In passing the full rate increase onto customers, Westpac said it would continue to review home loan products with a view to changing market conditions.
“In making these decisions, we consider multiple factors including the need to manage pricing changes in a sustainable way,” the bank said in an email to customers.
“These changes reflect the continued increase in funding costs.”
Yet there was silver lining for deposit customers, who will see their savings get a much-needed boost from the rate rise.
Eligible customers between 18 and 29 years old will be able to bask in the benefit of a 0.25 per cent increase to 3.75 per cent per annum. Customers with Westpac Life will also see an increase to 2.6 per cent while the eSaver variable rate will get a small boost to 2.55 per cent.
Westpac is the last of the big four banks to affect the rate hike after the increased rates came into effect on October 14 for customers of Commonwealth Bank, NAB, and ANZ.
All four banks passed on the RBA’s 0.25 per cent rate hike to their customers in full.
Last month, RBA Governor Phillip Lowe acknowledged the pain of higher interest rates at a time when households are feeling the pressure of the soaring costs of basics.
“I know that higher interest rates are unwelcome for many people, especially those who have borrowed large sums over recent times,” he told a parliamentary committee.
“The alternative, though, of allowing higher inflation to become entrenched would be even more difficult and it would damage our economic prospects.”
Westpac Chief Executive of Consumer Banking Chris de Bruin said the consistent rate rises have not resulted in a spike in customers experiencing financial difficulty.
“The majority of our borrowers remain in good shape with more than two thirds ahead of mortgage repayments, and no material change in customers seeking financial support at this time,” he said.
“We’re continuing to monitor the situation and bolster our customer support teams so we can help customers navigate the evolving rate cycle.”
The RBA will meet on November 1, when the board is likely to discuss another interest rate rise.