Big bank rate hikes hit today

By Roisin Kelly-Goldsmith ·

Owner occupier and investor home loan borrowers are affected today by interest rate hikes set by a number of banks in a bid to gain capital.

Westpac’s rate hike was the highest of the big four at 20 points, followed by ANZ at 18, and Commbank at the lower end of 15 points. Westpac’s Chief Executive George Franzis cited regulatory changes as the motivator for the rate increases. 

"This is a difficult decision and one that is not taken lightly," Franzis said. 

"We have sought to carefully balance the needs of our borrowers, depositors and our shareholders, as well as the competitive market we operate in. Increases in the cost of doing business inevitably influence business decisions, including price."

RELATED: How a rate rise could affect you

Regulations set by the Australian Prudential Regulation Authority (APRA) in July required banks to gain more capital per loans than previously to reduce credit risk. The banks argued that the regulations have compelled them to increase these interest rates. 

"Any decision to change interest rates is carefully considered," Matt Comyn, Group Executive for Retail Banking Services of CommBank said. 

"The cost of the new capital required to make the Australian banking system more secure needs to balance the interests of our customers.” 

Thirteen banks such as Adelaide and Bendigo Bank have also increased rates while big four bank NAB made the move earlier this month and increased rates on November 12.

Our data showed these rate hikes have resulted in a refinancing rush, with a 25% spike in switching in our home loan section last month.

Have you been stung by your provider lifting rates? Compare deals in our home loan comparison section or visit our refinance hub for helpful hints and tips for switching.

Home loan comparisons on Mozo - page last updated October 17, 2020

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