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Australian Banks Signal Potential Rise in Interest Rates: What It Means for You

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Two of the big four banks have moved to increase fixed rates in yet another signal Australia could be hit by a second cash rate hike in the coming months.
Westpac and Commonwealth Bank both raised fixed rates by 0.30 and 0.25 percentage points respectively, following the RBA’s unanimous decision to raise the cash rate to 3.85 per cent at its first meeting of the year.
Westpac and Commonwealth Bank
Westpac and Commonwealth Bank have both raised fixed rates following the RBA’s latest cash hike. (Nine)

For the second time in a mere six weeks, CBA has raised its fixed rates.

With this latest adjustment, all of the bank’s fixed-rate choices now exceed six percent.

Conversely, Westpac still offers one, two, and three-year fixed-rate home loans starting below six percent.

Among the big four banks, NAB currently provides the most competitive fixed rates, as reported by Canstar.

Overall, fixed rates are climbing industry-wide.

Canstar reports that around 60 lenders have hiked at least one fixed rate since the RBA’s decision to raise the official cash rate on February 3.

And fixed rates below five per cent have effectively disappeared from the loan market as a result.

The lowest possible fixed rate now sits at 5.18 per cent for a two-year term, offered by BankVic.

Westpac and CBA’s decision casts a shadow across any chance of a rate decrease next month.

The RBA (Reserve Bank Australia) building, 65 Martin Place, Sydney.
The RBA unanimously decided to raise the cash rate to 3.85 per cent at its first meeting of the year this month. (AFR)

The RBA will meet again in March and in May before the government hands down its 2026 federal budget.

“This latest round of fixed rate increases from Australia’s two biggest banks are in response to elevated fixed rate funding costs, but also an expectation this is not the end of the cash rate hikes,” Canstar data insights director Sally Tindall said.

RBA Governor Michele Bullock. (Alex Ellinghausen)

“Competition in the fixed rate space, and the near-anaemic appetite from customers to lock in their home loan rate is also likely to have played a role.”

Tindall said she expects the trend of climbing fixed rates to continue if the cash rate hikes persist in 2026.

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