National Australia Bank and Suncorp Bank have joined Westpac in saying they will pass on the latest 0.25 percentage point increase in official interest rates to mortgage customers.
NAB announced the change this afternoon. It will take effect on December 16, following Westpac’s move to also pass on the latest official rate rise to home loan customers in full. The decision sent the OCR to 3.10 per cent. The last time Australia had an interest rate above 3 per cent was in October 2012, when the median Australian house price was just under $520,000.
NAB did not announce changes to its savings interest rates, saying: “NAB’s savings and term deposit rates are continually under review.”
But, as it happens, the bank is unlikely to increase rates again for a further two months. The board doesn’t meet in January, meaning the nine weeks between now and its first meeting for 2023 on February 7 will provide an unusually long time for reflection – the first after eight relentless months of hikes.
At the time of writing, the big four banks’ OCR forecasts were as follows:
– CBA: 3.10 per cent by Late 2022, then dropping to 2.85 per cent by December 2023.
– NAB: 3.60 per cent by March 2023, remaining steady into 2024.
– Westpac: 3.85 per cent by May 2023, then dropping to 2.85 per cent by November 2024.
– ANZ: 3.85 per cent by May 2023, then dropping to 3.50 per cent by November 2024.
Today’s increase means the average borrower with a $500,000 mortgage would now have to find an extra $75 a month to meet repayments.
Since May – when rates were a now-distant 0.1 per cent – that same borrower is now paying an extra $834 a month due to eight consecutive rate hikes.
At the top end of the market, a borrower with a $1.5 million mortgage now has to find an extra $226 a month, having endured a $2501-a-month increase since the RBA began its hiking cycle.
The impact on Australian mortgage holders from the above forecasts is illustrated below:
ANZ Home Loan Interest Rate :
CommBank Home Loan Interest Rate:
NAB Home Loan Interest Rate:
Westpac Home Loan Interest Rate:
Thankfully, there is no monetary policy meeting in January, which means Australian mortgage holders will get respite from another rate rise. Hopefully by February or March there will be enough evidence of slowing domestic growth, the slowing global economy, and slowing inflationary pressures to allow the RBA to stop hiking.
Reference:
Marsh, S. (2022, December 6). RBA delivers eighth-straight rate hike to hit 10-year high. Interest rates rise Australia: RBA delivers eighth-straight rate hike to hit 10-year high; Cash rate now 3.10 per cent. Retrieved December 7, 2022, from https://www.9news.com.au/national/australia-interest-rates-reserve-bank-december-decision/93e8ee53-9d36-42a1-8dfe-76d28624480c
Terrifying reality for mortgage holders – news.com.au. (n.d.). Retrieved December 7, 2022, from https://www.news.com.au/finance/economy/interest-rates/terrifying-reality-for-mortgage-holders/news-story/94b92cc89e07a2a650bdf0ca982340e3
ALASDAIR DUNCAN Senior Finance Journalist · 07 December 2022 Fact checked, ALASDAIR DUNCAN Senior Finance Journalist · 07 December 2022, & ALASDAIR DUNCAN Senior Finance Journalist Alasdair Duncan is a Senior Finance Journalist at Canstar. (2022, December 6). Rba cash rate raise: ANZ, CBA, Nab & Westpac all respond. Canstar. Retrieved December 7, 2022, from https://www.canstar.com.au/home-loans/banks-respond-december-cash-rate-increase/