Westpac becomes first bank to raise interest rates just hours after RBA decision

Westpac announced on Tuesday evening that it will increase its variable home loan rates by 0.25 per cent, in line with the RBA’s decisions. The increase will come into effect on June 20.

It has not, however, increased its savings rates, instead saying they are under review, while offering a term deposit offer of 4.50 per cent for select customers.

“We understand interest rate increases put more pressure on household budgets,” Westpac chief executive consumer and business banking Chris de Bruin said.

“The majority of our customers are managing okay, but we know with each rate change it’s getting more challenging.

“We’re reaching out to some customers who may need additional support and have competitive rates available for those rolling off fixed loans to make the change easier.

“For customers in financial difficulty we are here to help and encourage them to call us early if they’re concerned.”

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The RBA earlier on Tuesday announced it would increase the cash rate by 0.25 per cent, defying market predictions which had anticipated a pause.

It was the 12th rate hike since May last year.

For the average Australian mortgage, today’s rate hike represents an additional $1,264 in mortgage repayments since the cash rate was 0.10 per cent in April 2022.

The other major banks – NAB, Commonwealth Bank and ANZ – are yet to pass on the rate hike.