Westpac customers will feel the misery of recently increased rates after the bank passed on the interest rate hike to customers.
Both new and existing customers will see their home loan interest rates rise by 0.25 per cent per annum.
The increase follows a 0.25 percent interest rate hike by the Reserve Bank of Australia earlier this month.
While passing on the full rate increase to customers, Westpac said it would continue to review its home loan products in response to changing market conditions.
“In making these decisions, we consider many factors, including the need to sustainably manage price changes,” the bank said in an email to customers.
“These changes reflect the continued increase in funding costs.”
Still, there was good news for deposit customers who will see their savings get a much-needed boost from the rate hike.
Eligible customers between the ages of 18 and 29 will be able to enjoy an increase of 0.25 percent to 3.75 percent per annum. Westpac Life customers will also see an increase to 2.6 per cent, while the eSaver variable rate will see a small increase to 2.55 per cent.
Westpac is the latest of the big four banks to hit a rate hike after higher rates for Commonwealth Bank, NAB and ANZ customers came into effect on October 14.
All four banks passed on the RBA’s 0.25 percent rate hike in full to their customers.
Last month RBA Governor Philip Lowe acknowledged the pain higher interest rates at a time when households are feeling the pressure of sharply rising prices for basic services.
“I know that higher interest rates are undesirable for many people, especially those who have borrowed heavily recently,” he told a parliamentary committee.
“However, the alternative of allowing higher inflation to take hold would be even more difficult and would damage our economic outlook.”
Westpac Consumer Banking chief executive Chris de Bruyn said the continued rate hikes had not led to a surge in customers facing financial difficulties.
“The majority of our borrowers remain in good standing with more than two-thirds of their mortgages outstanding, and there has been no significant change in the number of customers seeking financial support at this time,” he said.
“We continue to monitor the situation and strengthen our customer support teams so we can help customers navigate the rate change cycle.”
The RBA will meet on November 1, when the board is likely to discuss another interest rate hike.