Another major bank decides on RBA’s massive rate hike

Three of the four major banks have passed on the official interest rate hike from the Reserve Bank of Australia.

The RBA raised the spot rate by 50 basis points to 1.35 percent on Tuesday.

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Commonwealth Bank was the first to raise its variable interest rates for home loans, followed shortly after by ANZ and NAB.

All three have passed on the full 0.5 percent increase and will all come into effect on July 15.

Commonwealth Bank has passed on the RBA’s rate hike. Credit: MORGAN SETTEMONKEY IMAGE

CBA director of retail banking group Angus Sullivan acknowledged the “rapidly changing pricing environment”.

“We encourage our customers to message us in the CommBank app to explore different support options or to contact a home loan specialist,” he said.

The bank will also increase interest rates on select savings products, a statement said.

GoalSaver with bonus interest increases by 0.5 percent to 1.25 percent per year.

Youthsaver with bonus interest is set to rise 0.5 percent to 1.45 percent a year and it is said there will be a new special offer for 15-month term deposits at 2.50 percent a year.

“These new deposit rate changes, combined with the hikes we’ve made over the past two months, will help our customers achieve better savings no matter how they choose to save,” said Sullivan.

“We have a range of returnable products to meet the needs of our customers and encourage them to talk to us to make sure they have the product that best suits their needs.”

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Shortly after the CBA’s announcement, ANZ changed floating interest rates for home loans, also passing on the full 0.5 percent.

The changes will also take effect on July 15.

ANZ group executive Australia retail Maile Carnegie said: “As the cost of living has risen, some customers may be looking for support as they rethink their household budget and ANZ is here to support them.

“We have helped nearly 100,000 customers manage their home loans during the pandemic and our teams are now ready to assist with a range of support options, including a free home loan check-in that can help them reorganize their loan, so that it continues to meet their needs. †

The bank also said it would increase the bonus rate on Progress Saver accounts by 0.5 percent per annum and increase the interest on ANZ Plus accounts by 0.50 percent per annum.

The RBA raised interest rates by 0.5 percent on Tuesday. Credit: MONKEY

NAB also raised interest rates on its savings accounts.

Reward Saver accounts will grow 0.5 percent per year, while NAB’s 12-month term deposit account will increase to 2.5 percent, both effective July 15.

NAB group director of personal banking Rachel Slade said the bank would work closely with customers in the changing rate environment.

“Banks are there to serve their customers, so no matter who you bank with, the first step is to talk to a banker so we can find the best way to support you,” Slade said.

“Overall, our customers are in a good position and many are anticipating their refunds.

“For any client interested in understanding what the rising interest rate environment means for their home loan, or concerned about their financial situation, we are here to help.”

File image of a NAB branch. Credit: JOEL CARRETTMONKEY IMAGE

The RBA raised interest rates for the third consecutive month on Tuesday.

The rate was lowered to 0.1 percent during the pandemic before increasing it by 0.25 percent in May.

In June, it was raised another 0.5 percent before mirroring that in July, bringing the rate to 1.35 percent.

All four big four banks have passed on the interest rate hike in June.

Treasurer Jim Chalmers said the announcement was “very challenging news for hard-working Australians who are already struggling”.

“Mortgage repayments are now taking up a larger part of already stretched budgets,” he said.

“Average homeowners who owe $330,000 now have to find another $90 a month while trying to keep up with the cost of gas, electricity, groceries and other necessities.

“For Australians with a $500,000 mortgage, the additional repayments are over $137 per month.

“Rates were expected to rise, and they are expected to bite.”

House price data for June covers the Reserve Bank’s second rate hike in as many months. Credit: MONKEY

RBA Governor Philip Lowe said Australians can expect further increases.

“Inflation is expected to peak later this year and fall back to 2-3 percent next year,” he said.

“As global supply-side problems continue to abate and commodity prices stabilize, even at high levels, inflation is expected to moderate.

“Higher interest rates will also contribute to a more sustainable balance between the supply and demand of goods and services. Medium-term inflation expectations remain well anchored and it is important that they remain so.”

Inflation figures for the June quarter will be released by the Australian Bureau of Statistics later this month.

Meanwhile, the CoreLogic Home Value Index for June showed house prices in Sydney and Melbourne fell 2.8 and 1.8 respectively, possibly reflecting successive rate hikes.

Adelaide was the only city with a strong upward trend.

According to the mortgage rate change calculator: mozosomeone with a $500,000 mortgage would pay $133 more per month if their variable interest rate changes from 3.11 percent to 3.61 percent, after the 0.5 percent increase.

Someone with a $600,000 mortgage would pay $159 more per month.

Someone with a $750,000 mortgage would pay $199 more per month.

Someone with a $1 million mortgage would pay $265 more per month.

To calculate the exact change in your interest rate, click on here

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