Key Facts:

  • Westpac is increasing home loan interest rates.
  • The six-month, one-year, and two-year rates are increasing by 10 basis points.
  • Three- and four-year rates will increase by 16 basis points, and five-year rates by 26 basis points.
  • ANZ and BNZ have also increased rates recently.
  • The main driver of interest rate increases is the sharp lift in global rates and expectations of a higher OCR in the future.
  • ANZ has increased its test rate used to assess borrower applications to 9.1%.
  • Infometrics CEO expects the Westpac move is a response to rising wholesale rates.

Article Summary:

Westpac is joining other banks in increasing its home loan interest rates. The rates for the six-month, one-year, and two-year terms will increase by 10 basis points. Three- and four-year rates will increase by 16 basis points, and five-year rates by 26 basis points. ANZ and BNZ have already increased rates, and Westpac had previously lifted term deposit rates. The main drivers behind these rate increases are the sharp lift in global rates and expectations of a higher Official Cash Rate (OCR) in the future. ANZ has also increased its test rate used to assess borrower applications to 9.1%. The CEO of Infometrics attributes the Westpac rate hike to rising wholesale rates but questions the increase in shorter-term mortgage rates given the steady OCR and recently fallen swap rates.

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