Is your lender increasing your interest rate?
The RBA lifted the official cash rate for the first time in over a decade earlier this month. This means home loan rates for many borrowers are now rising, but what is your bank doing?
Which lenders are raising home loan rates?
| Lender | New rate* | Change | Effective date |
|---|---|---|---|
| CBA | 2.54% | +.25 | 20 May |
| NAB | 2.44% | +.25 | 13 May |
| Westpac | 2.44% | +.25 | 17 May |
| ANZ | 2.54% | +.25 | 13 May |
| Bankwest | 2.44% | +.25 | 18 May |
| Horizon Bank | 2.84% | +.25 | 4 May |
| St.George | 2.34% | +.25 | 17 May |
| Bank of Melbourne | 2.34% | +.25 | 17 May |
| BankSA | 2.34% | +.25 | 17 May |
| RAMS | 2.69% | +.25 | 17 May |
| Suncorp | 2.37% | +.25 | 18 May |
| Athena | 2.24% | +.25 | 5 May |
| AMP | 2.47% | +.25 | 13 May |
| ING | 2.34% | +.25 | 10 May |
| Greater Bank | 2.19% | +.25 | 10 May |
| homeloans.com.au | 2.24% | +.25 | 17 May |
| Tic:Toc | 2.14% | +.25 | 23 May |
*Note that we've chosen the lowest variable owner-occupier rate for each lender above. Most of these loans are available for borrowers with 20% deposits. But some rates are for borrowers with 30% deposits.
Several lenders have also announced interest rates on savings accounts will rise off the back of the RBA's decision. This means you can earn a little more interest on the money in your savings account.
How much will this rate rise cost me?
Even a small rise in your interest rate can cost you a lot more in repayments. And the bigger your loan, the more you'll end up paying. Here's a quick example using a low interest rate and the average home loan size.
Loan repayments before rates rise
- Loan amount: $595,869
- Loan term: 30 years
- Interest rate prior to rate rise: 2.10%
- Monthly repayments = $2,232
Loan repayments after rates rise
- Loan amount: $595,869
- Loan term: 30 years
- Interest rate after rate rise: 2.35%
- Monthly repayments = $2,308
In this scenario, a 25 basis points rise in interest rates costs you $76 a month. That's $912 a year extra.
My lender has lifted my rate: What do I do?
If your interest rate has just risen, it's a good idea to compare against other loans on the market. You may find you can get a better deal. That's true even if rates are rising across the board.
But if you find your rate is still quite competitive, then you might want to stay on your current loan for a while. Rates may continue to rise over the next few months, so it's worth checking every now and then to make sure you're still on a low rate.
My lender hasn't lifted my rate: Am I safe?
Not every lender increases rates immediately. Some may announce rate changes later. Some may decide not to lift rates. And yes, some lenders may even lift rates without telling customers.
So it's a really good idea to check in on your lender's website over the next few days and weeks to see if it has lifted rates. And check your home loan via your online banking site or app to see if your rate is higher now.
Time to switch to a better deal? Check out our home loan refinance guide.
