'Business as usual' – non-majors announce rate increases

Auswide Bank, AMP Bank ready to help customers

'Business as usual' – non-majors announce rate increases

Non-major banks are following the major banks in announcing changes to their home loan rates, in line with the official cash rate increase.

RateCity.com.au said on Monday that it was “business as usual” for interest rate hikes, with 28 lenders having already announced increases to their variable home loan rates.

Over the last week, ING, Auswide Bank, AMP Bank were among the non-major banks to announce they were passing on the May rate hike to borrowers in full.

Following the May RBA announcement, which took the OCR to 3.85%, NAB was the first major bank to announce its variable home loan rates would increase, effective from May 12. The move was followed by Westpac, ANZ, and CBA, which have also announced that they are passing through the 0.25% hike in full. Westpac has announced that the increase will take effect for new and existing variable home loan rate customers from May 16. For ANZ customers, the increase will take effect from May 13 (new customers) and May 27 (existing customers) and for CBA customers from May 12.

Non-major bank Auswide Bank said it would increase variable rates on its new and existing home, business and personal loans effective from May 11, and that its customer services teams were available to help borrowers in need.

Auswide Bank head of third party Tracy Field (pictured above left) told MPA that the bank continued to work with brokers to help home loan customers rolling onto higher home loan rates this year.

“Along with a number of other lenders, we have been proactive in recognising the impact of our customers who will be coming off low fixed rate loans shortly and discussing options with them,” Field said.  “We encourage our brokers and customers to communicate with us early if they are experiencing any signs of mortgage stress so we can assist.”

ING announced on Monday afternoon that all variable home loan rates would increase by 0.25%, effective May 9. The bank is also increasing interest rates applying to Savings Accelerator offers, applying a 0.30% per annum increase for customers with balances over $150,000.

Non-major bank AMP Bank has confirmed it will pass on the full 0.25% hike to customers effective May 5 (May 8 for existing customers).

AMP Bank group executive Sean O’Malley (pictured above centre) said the bank would continue to be available to brokers and their customers to assist them as they moved to higher interest rates.

“We also recognise the cost-of-living pressures facing many Australians and are working closely with brokers and customers to ensure those rolling off fixed term rates are supported, including providing access to discounted variable rates,” O’Malley said. 

The bank continues to actively review its fixed rates, to ensure they remain “competitively low”, he said.

According to RateCity.com.au, the lowest variable rate on Monday is 5.34%, announced by Greater Bank. Across the big four banks, the lowest advertised rate is currently CBA’s variable with offset rate (5.69%), followed by the bank’s basic variable rate, at 5.77%. 

RateCity.com.au research director Sally Tindall (pictured above right) told MPA that it was “business as usual” as lenders pass through the 11th interest rate increase.

Major banks Westpac and ANZ were enacting savings rate changes ahead of mortgage interest rate hikes, she said.  CBA, ANZ and NAB were enacting variable rate increases 10 days after the official cash rate rise, with Westpac home loan rate increases taking effect the following Tuesday.

“There still appears to be that two to three month lag on monthly mortgage repayments coming out of the bank account, banks still giving their customers in the majority of cases, at least 30 days or more to work out how they’re going to make adjustments to their budget,” Tindall said.