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Westpac first big four bank to hike fixed rates in 2022
Australia’s second largest bank, Westpac, has today hiked fixed rates for the first time in 2022 by up to 0.20 per cent.
The hikes were for owner-occupiers and investors and include its subsidiaries St George, Bank of Melbourne and BankSA.
Westpac fixed rate hikes for owner-occupiers
| Fixed term | Old rate | New rate | Change | Increase in repayments |
| 1-yr fixed | 2.34% | 2.39% | +0.05% | $13 |
| 2-yr fixed | 2.49% | 2.59% | +0.10% | $26 |
| 3-yr fixed | 2.89% | 3.04% | +0.15% | $40 |
| 4-yr fixed | 3.19% | 3.34% | +0.15% | $41 |
| 5-yr-fixed | 3.39% | 3.59% | +0.20% | $56 |
Source: RateCity.com.au Note: Rates are for owner-occupiers paying principal and interest on a package rate. Monthly repayments assume a $500K, 30-year loan paying principal and interest.
The move comes on the back of a spike in the cost of fixed rate funding and an expectation the US Federal Reserve will lift rates faster and more aggressively than previously anticipated.
Lenders that have moved at least one rate since Jan 1, 2022
| Rate type | Lenders that have cut | Lenders that have hiked |
| 1-yr fixed | 1 | 15 |
| 2-yr fixed | 1 | 15 |
| 3-yr fixed | 0 | 17 |
| 4-yr fixed | 0 | 12 |
| 5-yr-fixed | 0 | 16 |
| Variable | 6 | 2 |
Source: RateCity.com.au. Date range is 1 Jan to 21 Jan 2022. Note some lenders have moved more than one rate.
RateCity.com.au database analysis shows a total of 17 lenders have hiked fixed rates so far this year, but that number will rise and quickly.
There are now significantly more variable rates under 2 per cent than fixed, with 72 variable rates under 2 per cent and just 40 fixed.
Research director, Sally Tindall, said: “Westpac is the first big four bank to hike fixed rates in 2022 but certainly won’t be the last.”
“The cost of fixed-term funding is rising with inflation in the US hitting its fastest pace in nearly four decades,” she said.
“We expect other banks to follow within days on the back of sharp increases to the cost of wholesale funding.
“Mortgage holders who were fortunate enough to lock in a record-low fixed rate over the last couple of years are immune to these hikes, but only for the duration of their fixed rate term.
“Anyone who fixed at the start of the pandemic for two years should start thinking about what their next step might be. When they come off their fixed rate, they’ll be looking at a very different market.
“There are now just 40 fixed rates under 2 percent and the list is shrinking by the week. Some mortgage holders might decide to switch back to a variable rate as there are more sub-2 per cent options available,” she said.
Lowest big four bank owner-occupier home loan rates
| Rate type | CBA | Westpac | NAB | ANZ |
| 1 yr fixed | 2.54% | 2.39% | 2.54% | 2.39% |
| 2 yr fixed | 2.69% | 2.59% | 2.69% | 2.59% |
| 3 yr fixed | 3.14% | 3.04% | 3.14% | 2.99% |
| 4 yr fixed | 3.34% | 3.34% | 3.34% | 3.39% |
| 5 yr fixed | 3.59% | 3.59% | 3.59% | 3.59% |
| Variable | 2.29% | 2.19% | 2.29% | 2.19% |
Source: RateCity.com.au. Note: Some loan-to-value ratio requirements apply.
Lowest owner-occupier rates on RateCity.com.au
| Rate type | Lender | Advertised rate |
| 1yr fixed | RACQ, UBank | 1.79% |
| 2yr fixed | HSBC | 1.88% |
| 3yr fixed | Australian Mutual Bank | 1.98% |
| 4yr fixed | BankVic | 2.49% |
| 5yr fixed | BankVic | 2.59% |
| Variable | Reduce Home Loans | 1.77% |
Source: RateCity.com.au. Note Rates are for owner-occupiers paying principal and interest, LVR requirements apply for some loans
Disclaimer
This article is over two years old, last updated on January 21, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
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Product database updated 22 Dec, 2024
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