Westpac offers assistance after interest rate rise

Westpac has warned customers that they will have to get used to paying more for borrowing following the bank’s home loan interest rate hike last week.

Chief executive Gail Kelly insisted that the bank’s decision to increase its standard variable mortgage rate by 45 basis points was necessary given the current higher costs of funding.

However she insisted that no customer would lose their house as a result of the rise.

Ms Kelly said that rates remained comparatively low and added that the bank was keen to engage with customers about any concerns. "We will talk to our customers, explain the basis of the decisions we make and actually provide additional assistance should that be required," she added.

Westpac’s rate rise is almost double the increase in official rates set by the Reserve Bank of Australia (RBA) at 25 points. Commonwealth Bank of Australia raised its standard variable rate by 37 basis points and ANZ by 35 basis points, making now a good time to compare home loans.

Yesterday it was reported that homebuying was still on the rise despite the increase in interest rates, with both Sydney and Melbourne witnessing busy property auctions at the weekend.

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