Jump to content

You're currently viewing the forum as a Guest
register-now-button_orig.png
and join in with discussions   
ask migration questions
message other members

..and much much more!

Recommended Posts

Posted (edited)

So late yesterday (after I finished my other post, naturally) Westpac announced it will be increasing rates by 0.14% p.a. quoting increased wholesale funding:

In particular the bank bill swap rate, which is a key wholesale funding rate for mortgages, increased by about 25 basis points between February and March this year and has remained elevated.
“We initially hoped that this increase would be temporary, and therefore we have incurred these costs over the last six months. The rate changes announced today will not recover these costs..."

- Official Westpac Media Release, 29 August 2018

I.e we didn't increase them then, but we are now, and not by the full amount needed cover costs. Interpret that as you may.

So the big question is when/if this will cause a domino effect with the other big banks? There have been rises in smaller banks but none of the big four, perhaps due to the target already firmly on their backs as a result of the Royal Commission. Will they follow suit hoping that Westpac will take the first wave of anger and disapproval? Or will they stand fast in an effort to claw back a little customer sentiment? (Along with some nicely crafted marketing giving themselves a cheeky gold star of course). No doubt we will find out shortly.

Bottom line, the only real way to guarantee your rate and repayment is to be on a fixed rate, but they come with restrictions - so do you homework first to see if it is right for you.

As I have already mentioned elsewhere rates are so low at the moment that when they eventually go up again it will be a shock to the system for many that have only ever known low rate environments. So prepare yourselves. Those of the era of double-digit interest rates know what I mean. The RBA knows it too and have flagged rising rates as something to prepare for. Some economists now argue this recent move by Westpac (and potentially by others) may now delay any increase decisions by the RBA.

Time will tell.

Edited by Carol from Vista Financial
Typo sorry!

MFAA Finance Broker

Vista Financial Services Pty Ltd

P | +61 8 8381 7177 W | www.vistafs.com.au

Credit Representative No. 506912 | Centrepoint Alliance Lending Pty Ltd | Australian Credit Licence No. 377711

Please note that I don’t know absolutely all the ins and outs of your current financial situation yet, so my comments are general in nature and for educational purposes only.

Share this post


Link to post
Share on other sites

MFAA Finance Broker

Vista Financial Services Pty Ltd

P | +61 8 8381 7177 W | www.vistafs.com.au

Credit Representative No. 506912 | Centrepoint Alliance Lending Pty Ltd | Australian Credit Licence No. 377711

Please note that I don’t know absolutely all the ins and outs of your current financial situation yet, so my comments are general in nature and for educational purposes only.

Share this post


Link to post
Share on other sites

ANZ increases their rates first, CBA follows a few minutes later

CBA increase by 0.15%

ANZ increase by 0.16%

You can read their media releases here:

CBA announcement

ANZ announcement (note here they have advised that those people living in postcodes they have deemed as drought affected will also have an equivalent increase in a discount - which means they don't escape the base rate rise, but are given a discount of the same 0.16% so they aren't impacted)

No word on NAB just yet.


MFAA Finance Broker

Vista Financial Services Pty Ltd

P | +61 8 8381 7177 W | www.vistafs.com.au

Credit Representative No. 506912 | Centrepoint Alliance Lending Pty Ltd | Australian Credit Licence No. 377711

Please note that I don’t know absolutely all the ins and outs of your current financial situation yet, so my comments are general in nature and for educational purposes only.

Share this post


Link to post
Share on other sites

Seems NAB are taking advantage of the situation here...

As you may have heard already there has been no move by NAB to increase their rates - their media statement saying they are holding them for now in an effort to 'rebuild customer loyalty'.

Is this the case or are they just being opportunistic in an effort to capture market share? If they do eventually move rates to account for increased funding costs like the others, are they merely setting themselves up for a bigger fall from a moral high ground? I think their marketing team will have to prove their worth and really pull a rabbit out the hat if/when they do increase them.


MFAA Finance Broker

Vista Financial Services Pty Ltd

P | +61 8 8381 7177 W | www.vistafs.com.au

Credit Representative No. 506912 | Centrepoint Alliance Lending Pty Ltd | Australian Credit Licence No. 377711

Please note that I don’t know absolutely all the ins and outs of your current financial situation yet, so my comments are general in nature and for educational purposes only.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×