Higher home loan rates kick in today as NAB and ANZ concede some savings hikes

While variable mortgage rates are on the rise today for CBA, NAB and ANZ customers, the banks are also increasing savings rates – but only on select accounts.

While CBA and Westpac had previously confirmed they would hike some savings accounts, NAB and ANZ left savers out of their RBA announcements completely.

Today, the banks have caved to pressure, lifting savings rates but only some accounts:

• ANZ’s new ‘Plus Save’ account has increased by 0.30% points to 3.00% for its 40,000 customers, but the bank hasn’t lifted its Online or Progress Saver accounts.
• NAB’s 1.3 million Reward Saver customers have seen their rate increased by 0.50% points to 2.25%.

In addition to its announcement last week, CBA has increased the honeymoon rate on its Netbank Saver by 0.50% points, but this will only benefit new customers.

Big four bank savings rates – September RBA increases for existing customers

RateCity.com.au database analysis:

• 30 banks have so far announced they’re hiking at least one savings account rate since the RBA September meeting.
• 6 banks offering ongoing rates above 3% for all adults: ING (3.60%), Virgin Money (3.60%), ubank (3.35%), MyState (3.20%), Rabobank (3.15%) and BOQ (3.10%).
• 12 banks are lifting at least one savings account rate beyond the RBA hike this month including CBA, Westpac, Macquarie Bank and MyState.

Big four bank bonus saver rates

Source: RateCity.com.au. Conditions for max rate apply. Westpac rate effective 20 September.

Big four bank online saver rates

Source: RateCity.com.au.

RateCity.com.au research director, Sally Tindall, said: “ANZ and NAB have caved to pressure and decided to hike at least one of their savings rates.”

“CBA has tried to put its best foot forward, hiking its GoalSaver above and beyond the RBA’s half a percentage point hike this month, but with a new ongoing rate of just 2.10 per cent is still 1.50 percentage points behind the market leaders,” she said.

“While it’s great to see some big bank savers getting a much-needed rise, millions are still getting duped by their bank if they happen to be in the wrong account.

“It’s hard to believe that Australia’s biggest banks are still offering rates as low as 0.85 per cent to a large portion of their customers. Savers should be looking for an interest rate that’s above the cash rate, not almost three times below it.

“In the case of ANZ, its Online Saver customers are getting just 0.60 per cent on their hard-earned cash. That’s absurd, particularly when the bank is offering a no-strings attached rate of 3.00 per cent on its new Plus platform.

“If your savings rate is below the current cash rate, know you’re being taken for a ride. There is competition in the market, you just have to get up and look for it. In this environment, a good rate is around 3 per cent, potentially even more,” she said.

Latest round of big four bank mortgage hikes kick in

CBA, NAB and ANZ variable rate mortgage customers will see their interest rates rise by 0.50 percentage points today, while Westpac’s rates will rise next Tuesday.

In total, variable rate borrowers have seen their rates rise by 2.25 percentage points since May, taking the average existing variable owner-occupier to an estimated rate over 5 per cent.

While millions of variable borrowers will be charged a higher interest rate from today, their repayments won’t rise straight away. This is because banks typically give long notice periods before increasing monthly repayments, meaning it could take up to a couple of months before they start paying more.

Big four banks’ minimum notice periods for rate rises for principal and interest customers:

• CBA: at least 20 days’ notice from the date of customer’s notification letter.
• Westpac: at least 30 days’ notice from the date of letter.
• NAB: at least 32 days’ notice from the date of letter.
• ANZ: at least 30 days’ notice from the date of letter.

RateCity.com.au analysis:

• 53 lenders have so far announced variable mortgage rate rises this month; a live list is here.
• 3.74% is currently the lowest variable rate, from lenders which have announced Sept RBA changes.
• 10+ lenders are expected to offer variable rates under 4 per cent once all the Sept hikes take effect.
• For someone who had a $500,000, 25-year loan before the RBA rate rises began in May, they’ll be paying an extra $614 a month in interest to their lender as a result of the hikes.

Sally Tindall said: “If you’ve had your home loan a while, and haven’t haggled, you’re likely paying a ‘mortgage loyalty tax’.”

“While existing customers have seen their rates rise by 2.25 percentage points since May, 26 lenders have cut their new customer rates in this time to attract new business,” she said.

“There has already been record levels of refinancing in the last few months, and this is likely to continue as borrowers switch lenders to save money.

“That said, the window to refinance may be closing for some borrowers. Rising rates and falling property prices will make switching lenders more difficult for those who bought with small deposits or borrowed at capacity,” she said.

Big four banks lowest rates

Source: RateCity.com.au. Notes: rates are for owner-occupiers paying principal and interest. LVR requirements apply on some rates. Westpac rates effective 20 September.

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