Westpac customers will feel the pinch of newly raised rates after the bank moved to pass on interest rate hikes to customers.
New and existing customers will see their variable interest rates increase by 0.25% per year.
The increase matches the 0.25% hike in interest rates implemented by the Reserve Bank of Australia earlier this month.
Passing on the full rate increase to customers, Westpac said it will continue to review home loan products in view of changing market conditions.
“In making these decisions, we consider several factors, including the need to manage price changes in a sustainable way,” the bank said in an email to customers.
“These changes reflect the continued increase in funding costs.”
Still, there was a silver lining for depositary customers, who will see their savings get a much-needed boost from the rate hike.
Eligible customers between the ages of 18 and 29 will be able to take advantage of an increase of 0.25% to 3.75% per annum. Westpac Life customers will also see an increase to 2.6% while the variable rate eSaver will benefit from a slight increase to 2.55%.
Westpac is the latest of the big four banks to affect the rate hike after the rate hike came into effect on October 14 for Commonwealth Bank, NAB and ANZ customers.
All four banks passed on the RBA’s 0.25% rate hike in full to their customers.
Last month, RBA Governor Phillip Lowe acknowledged the pain of higher interest rates at a time when households are feeling the pressure from soaring commodity costs.
“I know that higher interest rates are not welcome for many people, especially those who have borrowed large amounts of money lately,” he told a parliamentary committee.
“The alternative, however, of allowing higher inflation to take hold would be even more difficult and it would hurt our economic prospects.”
Westpac Consumer Banking chief executive Chris de Bruin said steady rate hikes have not led to an increase in the number of customers in financial difficulty.
“The majority of our borrowers remain in good shape with more than two-thirds ahead of mortgage payments, and no significant change in the number of customers seeking financial support at this time,” he said. declared.
“We continue to monitor the situation and strengthen our customer support teams so that we can help customers navigate the changing rate cycle.”
The RBA will meet on November 1, when the board is likely to discuss another interest rate hike.