Australia's big four banks have raised interest rates on mortgages, business loans, personal loans, and savings accounts following the Reserve Bank of Australia's (RBA) fifth cash rate hike this year. The RBA increased the cash rate to 4.85 percent, an 18-year high, to combat persistent inflation. RBA governor Michele Bullock warned that the rate hike would make people feel poorer and limit their spending power.
Macquarie Bank was the first to respond, announcing a 0.25 percent increase in variable home loan rates within an hour of the RBA's decision. The big four banks, Westpac, NAB, ANZ, and CBA, followed suit, with the new rates taking effect from mid-November. ANZ noted that a 0.25 percent increase would add approximately $79 per month to repayments on a $500,000 mortgage.
Savers with the right accounts will benefit from higher interest rates, but banks have been slow to pass on rate increases to savers. Comparison site Canstar revealed that customers often need to meet specific conditions to unlock the highest rates, or else they revert to a base rate of around 0.10 percent. All banks encouraged customers under financial strain to contact them for assistance.