Businesses affected by latest Westpac interest rate rise

Westpac raised interest rates on Monday for some of its business loans due to “higher funding costs” to its business division. This news follows the rate rise NAB and ANZ announced earlier this month.

A Westpac spokesperson told Fairfax the big bank’s business division experienced increased costs such as higher funding overheads which has impacted on returns.

"While we have been disciplined in managing our margins, over the long term all businesses must deliver sustainable returns."

Westpac notified customers on Monday that a number of its business loan interest rates and margins will increase by up to 0.3%. See the full list of business loans affected by the rate hike here.

Fairfax reported the rate increase will also affect some of Westpac’s home loan customers that have a line of credit feature tied to their property.

This unexpected increase comes as RBA Governor Glenn Stevens told a House of Representatives Committee earlier this month he’s not convinced banks have good reason to be lifting rates.

"I don't really see much of a case for independent increases in lending rates based on funding costs as they've evolved just lately," he said.

According to Mozo’s database, rates for business loans of $50,000 start at 4.39% (Suncorp Business Essential Loan secured to a residential property). To compare all business loans, head to the Mozo's business loan hub.