Westpac is the first of the big four banks to hike out-of-cycle
Staff reporterDecember 7, 2020
Variable rate customers who have their mortgage with Westpac and some of their subsidiaries will be forking out an average of $35 extra per month and $420 per year.
This is thanks to Westpac hiking rates by 14 basis points.
The new Treasurer Josh Frydenberg has demanded Westpac justify its out-of-cycle interest rate increase.
RateCity research director Sally Tindall said Westpac had held out longer than the market expected before caving into the pressure to hike rates.
"Westpac has today decided to use variable rate home loan customers to help ease their cost of funding pressures. Most households will be able to absorb the rate hike, however anyone who overstretched to get in the market will feel burdened by this extra cost," she said
Now that Westpac has hiked, taking the brunt of the bad PR, it is expected the other three banks will match them.
“Ironically the banks are desperately seeking out customers to boost their lagging profit margins. They’re doing this by offering rock bottom rates, but only to new customers so if you’ve got a bit of equity in your home, now is a great time to consider refinancing,” she concluded.
