More than 50 follow Reserve Bank's lead
The Reserve Bank of Australia’s decision to bump up the cash rate on November 7 has opened the door for lenders to pass on the full 0.25% interest rate hike, with one lender increasing its rate by 0.35%.
From November 9, all Bluestone variable interest rates for existing home loan accounts increased to between 0.25% and 0.35%.
Lending comparison site Mozo tracks 94 home loan lenders and at 1pm on November 17, it had recorded 52 lenders as having announced they were lifting their interest rates. You can see the full list at the bottom of this article.
But there were still 42 lenders who had not revealed whether they will follow suit and raise their rates.
CBA revealed on November 9 that it would increase its variable home loan reference rates by 0.25% after NAB, ANZ and Macquarie Bank announced the day before that they would pass on the cash rate hike to their variable borrowers in full, effective November 17.
Westpac also revealed on November 8 that its home loan variable interest rates will increase by 0.25% for new and existing customers, but that won’t be effective until November 21.
Even before this month’s RBA announcement, borrowers were already under financial pressure, having already faced 12 RBA rises since May last year.
Mozo says interest rate rises most aggressive since early 1990s
Mozo finance expert Rachel Wastell (pictured above) said the run of rate rises increases amounted to the most aggressive rate hiking cycle since the early 1990s and would place significant pressure on mortgage holders.
“The analysis shows that most Aussie mortgage holders have most likely had to find an extra thousand dollars or more every month,” Wastell said. “That’s nothing to sneeze at, especially in the lead up to Christmas.”
Wastell said she expected lenders would have some customers battling economic distress.
“While some borrowers have been able to get ahead with additional repayments or have had substantial savings buffers to cover that extra $1,000 or more each month they’re facing in rising repayments, many households are already stretched by the 12 hikes that happened from May 2022 to June this year.
“The 13th rate hike could push them over the edge. Now is not the time for borrowers to bury their heads in the sand or take a ‘she’ll be right’ approach, especially as RBA rate cuts aren’t likely to happen until late next year.”
Mozo data shows NSW homeowners under most pressure
According to data from Mozo, NSW homeowners are under the most pressure because of the raft of interest rate rises, as they’re forced to find an extra $1,690 to cover a monthly mortgage repayment of $5,286 on average – based on the owner-occupier loan size of $756,821.
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State by State: How much are home loan repayments rising by? |
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Average Home Loan Size* |
Average Monthly Repayment before the November RBA Rate Hike (6.62% AVR) |
Average Monthly Repayment after the November RBA Rate Hike (6.87% AVR) |
$ Increase in Monthly Repayment after the November Rate Hike |
Total $ Increase since RBA started the rate hiking cycle in May 2022 |
|
Australia |
$598,867 |
$4,089 |
$4,183 |
$95 |
$1,337 |
|
New South Wales |
$756,821 |
$5,167 |
$5,286 |
$119 |
$1,690 |
|
Victoria |
$594,155 |
$4,056 |
$4,150 |
$94 |
$1,326 |
|
Queensland |
$537,915 |
$3,672 |
$3,757 |
$85 |
$1,201 |
|
South Australia |
$496,587 |
$3,390 |
$3,469 |
$78 |
$1,109 |
|
Western Australia |
$475,405 |
$3,246 |
$3,321 |
$75 |
$1,061 |
|
Tasmania |
$460,183 |
$3,142 |
$3,214 |
$73 |
$1,027 |
|
Northern Territory |
$437,821 |
$2,989 |
$3,058 |
$69 |
$977 |
|
Australian Capital Territory |
$587,307 |
$4,010 |
$4,102 |
$93 |
$1,311 |
|
Source: mozo.com.au based on average owner occupier loan size from September 2023 ABS Lending Indicators, using the average advertised variable home loan rate in the Mozo database for owner occupiers paying principal and interest with a loan-to-value ratio of 80%. The comparison between repayment amounts is using the average variable rate of 3.02% p.a. from the 3rd May 2022 and the average variable rate of 6.62% p.a. on the 6th November 2023 with 0.25% p.a. added to make 6.87% p.a.. |
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Victorians, Queenslanders, and ACT mortgage holders are all searching for upwards of $1,200 extra a month, while the Northern Territory is the only state that is looking for less than $1,000 more a month at $977.
Mozo urges borrowers to look for lower interest rates
“If you’re struggling to find the extra cash to cover these rising repayments, it’s important to keep an eye on the market to see if you can get a lower interest rate,” Wastell said.
“This is especially true for homeowners paying rates starting with 6, 7 or 8 as after the November rate hike we still have 17 lenders on the Mozo database offering rates lower than 5.75%.”
Wastell said after 13 rate hikes, there was a real risk that borrowers were exhausted, and that the thought of checking interest rates after the latest rate hike could be too much to bear.
“However, it’s more important for homeowners to check rates now than ever, especially as we’re seeing rates on the Mozo database starting with a 9.”
Wastell said when it came to home loan rates, the smallest difference in interest rates could equate to a big difference in repayments.
“As little as half a percentage point difference in interest rates can add up to tens of thousands of dollars more in interest over a 20 or 30-year-loan term, so it’s crucial for mortgage holders to check their rate.”
Despite borrowers doing it tough following the latest RBA cash rate rise, the country’s major banks have reported a combined cash profit after tax of $32.5 billion, up 12.4% compared to FY22.
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Lenders who have passed on the November RBA Rate Hike |
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|
Provider |
SVR Loan |
OLD Standard Variable Rate (SVR) |
New SVR |
Change |
Effective Date |
|
abal banking |
Essentials Home Loan |
9.14% |
9.29% |
0.25% |
15 November |
|
AMP Bank |
Variable Rate Loan (Owner Occupier, Principal & Interest, LVR <90%) (Basic Package) |
7.39% |
7.64% |
0.25% |
13 November |
|
ANZ |
Standard Variable Rate (Owner Occupier, Principal & Interest) |
7.19% |
7.44% |
0.25% |
17 November |
|
Athena |
Power Up (Liberate, Owner Occupier, Principal & Interest, 70%-80% LVR) |
6.29% |
6.54% |
0.25% |
09 November |
|
Aussie |
Select Basic Variable (LVR>90%, Owner Occupier, Principal & Interest) |
6.99% |
7.24% |
0.25% |
16 November |
|
Australian Military Bank |
Variable Offset Home Loan |
7.09% |
7.34% |
0.25% |
21 November |
|
Australian Unity |
Standard Variable Rate (Owner Occupier, Principal & Interest) |
7.71% |
7.96% |
0.25% |
16 November |
|
Home Loan Plus (Owner Occupier, Principal & Interest, LVR 80-90%) (Freedom Package) |
6.29% |
6.54% |
0.25% |
14 November |
|
|
Basic Home Loan (LVR>90%, Owner Occupier) |
6.20% |
6.45% |
0.25% |
21 November |
|
|
Bank First |
Complete Home Loan (LVR 90-98%, Owner Occupier) |
6.69% |
6.94% |
0.25% |
17 November |
|
Bank of Melbourne |
Standard Variable Home Loan (Owner Occupier, Principal & Interest, LVR 80-95%) |
8.84% |
9.11% |
0.25% |
21 November |
|
Clear Path Variable Rate Home Loan (Owner Occupier, Principal & Interest) |
7.99% |
8.24% |
0.25% |
10 November |
|
|
Bank of Sydney |
Expect More Home Loan (Owner Occupier, Principal & Interest, LVR<90%) (Package) |
7.30% |
7.55% |
0.25% |
17 November |
|
Bank of us |
Topline (Owner Occupier, LVR>90%) |
7.19% |
7.44% |
0.25% |
21 November |
|
BankSA |
Standard Variable Home Loan (Owner Occupier, Principal & Interest) |
8.85% |
9.11% |
0.25% |
21 November |
|
Mortgage Shredder (Owner Occupier, Principal & Interest) |
8.62% |
8.87% |
0.25% |
17 November |
|
|
Bendigo Bank |
Variable Rate Residential (Owner Occupier, Principal & Interest) |
8.78% |
9.03 |
0.25% |
17 November |
|
Bluestone |
Prime Home Loan (Owner Occupier, Principal & Interest, LVR 85-90%) |
8.14% |
8.39% |
0.25% to 0.35% |
09 November |
|
Commonwealth Bank |
Standard Variable Rate (Owner Occupier, Principal & Interest) |
8.55% |
8.80% |
0.25% |
17 November |
|
Community First Bank |
Standard Variable Home Loan (Owner Occupier, Principal & Interest) |
8.19% |
8.44% |
0.25% |
17 November |
|
Credit Union SA |
Variable Rate Home Loan (Owner Occupier, Principal & Interest) |
6.89% |
7.14% |
0.25% |
15 November |
|
Easy Street |
Street Smart Variable Home Loan (Owner Occupier, Principal & Interest) |
5.79% |
6.04% |
0.25% |
17 November |
|
Offset 90 (Broker Special) (Owner Occupier, Principal & Interest) |
6.99% |
7.24% |
0.25% |
10 November |
|
|
FreedomLend |
Variable Home Loan (LVR 80-90%, Principal & Interest, Owner Occupier) |
7.00% |
7.25% |
0.25% |
09 November |
|
G&C Mutual Bank |
Standard Variable (Owner Occupier, Principal & Interest) |
8.50% |
8.75% |
0.25% |
13 November |
|
Offset Variable (Owner Occupier, Principal & Interest, LVR >90%) |
6.79% |
7.04% |
0.25% |
14 November |
|
|
Greater Bank |
Great Rate Home Loan (Owner Occupier, Principal & Interest) |
7.61% |
7.86% |
0.25% |
17 November |
|
Standard Variable (Owner Occupier) |
8.49% |
8.74% |
0.25% |
21 November |
|
|
Homestar |
Star Classic Home Loan (<90%, Principal & Interest) |
6.55% |
6.90% |
0.25% |
15 November |
|
Low Rate Home Loan (Owner Occupier, Principal & Interest, 90-95% LVR) |
7.04% |
7.29% |
0.25% |
17 November |
|
|
Home Smart Loan (Owner Occupier) |
8.51% |
8.76% |
0.25% |
27 November |
|
|
Hume Bank |
myBlue Variable Rate Home Loan (Owner Occupier, Principal & Interest, LVR 90-95%) |
6.84% |
7.09% |
0.25% |
17 November |
|
IMB Bank |
Standard Variable Home Loan (Owner Occupier, Principal & Interest) |
8.71% |
8.96% |
0.25% |
17 November |
|
Mortgage Simplifier (LVR>90%, Owner Occupier, Principal & Interest) |
6.44% |
6.69% |
0.25% |
14 November |
|
|
Smart Home Loan 90 (Owner Occupier, Principal & Interest) |
6.79% |
7.04% |
0.25% |
10 November |
|
|
Macquarie |
Offset Home Loan (Owner Occupier, LVR 80-90%, Principal & Interest) |
7.05% |
7.30% |
0.25% |
17 November |
|
ME |
Flexible Home Loan (Owner Occupier, LVR 80-95%, Principal & Interest) |
8.61% |
8.86% |
0.25% |
11 November |
|
MyState Bank |
Standard Variable Home Loan (Owner Occupier, Principal & Interest) |
8.17% |
8.42% |
0.25% |
17 November |
|
NAB |
Tailored Home Loan (Owner Occupier, Principal & Interest) |
8.52% |
8.77% |
0.25% |
17 November |
|
Real Options Home Loan (Owner Occupier, Principal & Interest) |
8.25% |
8.50% |
0.25% |
17 November |
|
|
RAMS |
Full Feature (Owner Occupier, Principal & Interest) |
8.61% |
8.86% |
0.25% |
21 November |
|
Regional Australia Bank |
Mortgage Offset Home Loan (Owner Occupier, Principal & Interest) |
7.82% |
8.07% |
0.25% |
15 November |
|
Resi |
Essential Options Prime 90 (Owner Occupier, Principal & Interest) |
7.04% |
7.29% |
0.25% |
17 November |
|
Prime (Owner Occupier, Principal & Interest, LVR 90-95%) |
7.29% |
7.54% |
0.25% |
17 November |
|
|
South West Slopes Credit Union |
Standard Variable Rate (Owner Occupier, Principal & Interest) |
6.35% |
6.60% |
0.25% |
15 November |
|
St.George |
Standard Variable Home Loan (Owner Occupier, Principal & Interest, LVR 80-95%) |
8.86% |
9.11% |
0.25% |
21 November |
|
Suncorp |
Standard Variable Loan (LVR<95%, Owner Occupier, Principal & Interest) |
8.98% |
9.23% |
0.25% |
17 November |
|
The Capricornian |
Lifestyle Home Loan (Owner Occupier, Principal & Interest) |
7.88% |
8.23% |
0.35% |
14 November |
|
The Mutual Bank |
Standard Variable Home Loan (Owner Occupier) |
8.38% |
8.63% |
0.25% |
17 November |
|
Own Home Loan (Owner Occupier, Principal & Interest, LVR <85%) |
6.44% |
6.69% |
0.25% |
16 November |
|
|
Reward Me Variable Rate Home Loan (Owner Occupier, Principal & Interest, LVR 90-95%) |
8.62% |
8.87% |
0.25% |
10 November |
|
|
Westpac |
Rocket Repay Home Loan (Principal & Interest) |
8.88% |
9.13% |
0.25% |
21 November |
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Source: mozo.com.au as at 17th November 2023 at 12.25pm |
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Were you surprised to see so many banks had passed on interest rate hikes to their customers? Share your thoughts below.
