ING, Bendigo Bank among lenders to pass on full 0.50% rate hike
In response to the Reserve Bank of Australia’s decision to lift the cash rate by 50 basis points this month, several lenders including ING and Bendigo Bank have announced plans to increase their variable home loan rates.
ING will be bumping up its rates on 15 September. When the changes take effect, variable rates on its Mortgage Simplifier product (OO, P&I) will be 4.19% p.a. (4.22% p.a. comparison rate*) for borrowers with an LVR of 80%.
Meanwhile, effective 16 September, Bendigo Bank’s Complete Home Loan (OO, P&I) will increase to 5.34% p.a. (5.57% p.a. comparison rate*) for borrowers with an LVR between 80-90%.
The RBA raised interest rates on Tuesday last week as part of its ongoing efforts to tame inflation. While it has acknowledged that it is not on a pre-set path, more rate hikes are expected in the coming months.
Average variable rates in Australia
Within a few days of the decision, ANZ, CommBank and NAB announced they intend to lift variable rates in line with the cash rate. Today, Westpac announced it will follow suit.
While many lenders are still mulling over how to respond, things will likely play out much like they did in previous months, with the majority of the lenders passing on the full rate hike to their variable rate customers.
If they do, the average borrower with a $500,000 loan and 25 years left to pay it off could see their monthly repayments increase by around $144.
In a speech delivered last Thursday, RBA governor Philip Lowe hinted that after four consecutive months of 50 basis point increases, the pace of monetary tightening is finally due to slow down.
RELATED: How have the big four banks responded to the September RBA rate hike?
Economists at CommBank had called for a “business as usual” 25 basis point hike in October, in light of lags in the transmission of monetary policy and the risk to households posed by moving rates too high too quickly.
“Such a move would take the cash rate to 2.60 per cent,” CommBank said.
“From there our central scenario sees the RBA deliver one final 25 basis point rate hike at the November Board meeting which would take the cash rate to 2.85 per cent.”
For information on interest rates and lending trends, head over to our home loan statistics page. And if you’re in the market for a home loan, visit our home loan comparison page, or browse the selection below.
* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
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