The hikes keep on coming: CBA and Westpac increase new customer rates… again

Australia’s two biggest home loan lenders, CBA and Westpac, have increased new customer variable rates by up to 0.15 percentage points.

CBA has increased the rate on its variable Wealth Package by 0.10 percentage points, while Westpac has increased the rate on its basic variable loan by 0.15 percentage points.

These hikes are in addition to the standard RBA increases. Existing customers are not affected by today’s changes.

Westpac has also increased select fixed rates by up to 0.55 percentage points (see further below).

CBA’s Wealth Package loan – new customers only

For owner-occupiers paying principal and interest

Source: RateCity.com.au.

Westpac’s Flexi First Option Home Loan – new customers only

For owner-occupiers paying principal and interest

Source: RateCity.com.au.

This is the fifth time CBA has increased the rate on its Wealth Package for new customers in the last four months, in addition to the standard RBA hikes.

As a result, CBA’s Wealth Package new customer variable rate has risen by 1.17 percentage points since 30 March 2023, while existing variable customers have only seen their rates rise by 0.75 percentage points – that’s 0.42 percentage points extra for these new customers.

For Westpac, this is the second time the bank has increased the rate on its basic variable loan in the last two and a half months, in addition to the standard RBA hikes.

Variable rate hikes from the big four banks since 1 March 2023

Note: these hikes are in addition to RBA increases

Source: RateCity.com.au

Fixed rates back on the rise

Westpac has today increased its fixed rates by up to 0.55 percentage points for owner-occupiers paying principal and interest.

Westpac lowest fixed rates

Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest.

Westpac is not moving its fixed rates in isolation. RateCity.com.au data shows a total of 59 lenders have increased 1-year fixed rates in the last month, while 48 lenders have increased their 2-year fixed rates in this time.

Lenders that have changed at least one fixed rate in the last month

Source: RateCity.com.au. Note some lenders have changed more than one fixed rate.

RateCity.com.au research director, Sally Tindall, said: “It’s like Groundhog Day – another Friday, another set of rate hikes from the big four.”

“This is the fifth time CBA has increased its Wealth Package variable rate for new customers, in addition to the standard RBA hikes. The bank is responding to higher cost of funding pressures, but also a determination to cool the refinancing market,” she said.

“As a result, a new CBA customer is set to pay up to 0.42 percentage points more than an existing borrower who took out a loan just months earlier. After years of new customer discounting, that’s anything but normal.

“Moves like this from the big four banks can have a ripple effect, unless customers take advantage of the competition.

“The big four banks have all but kissed goodbye to rates under 6 per cent, yet there are XXX lenders offering variable rates under 5.50 per cent, even once the June RBA hike is factored in.

“If you’re in the market for a home loan, take the time to look beyond the big four to see what’s possible.

“A lower rate will help keep a lid on your new mortgage repayments, but also boost your borrowing capacity in what is an incredibly difficult market.

“Borrowers who were looking to fix their rate with Westpac for one or two years will be exasperated to learn these rates have shot up overnight.

“While the vast majority of borrowers are now opting to stay variable until the dust settles on the cash rate, those wedded to the idea of fixing would do well to shop around,” she said.

Big four banks’ lowest advertised rates

Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest. LVR requirements apply.

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