ANZ and Westpac raise fixed rates again
ANZ and Westpac again raised the interest rate on their fixed rate loan products.
Rapid rate hikes now see a five-year fixed rate loan from ANZ with an interest rate of 6.09%, up 0.9%, while Westpac hit 5.39%, up 0.5% on its five-year loan. .
RateCity.com.au research director Sally Tindall said fixed rates are likely to continue to rise.
“ANZ and Westpac have launched a new round of hikes as the cost of fixed rate funding continues to rise, in line with market expectations the cash rate could reach 4%,” Ms Tindall said.
“We now have flat rates for homeowners starting with a ‘5’ and in some cases a ‘6’.”
Ms Tindall said the majority of ANZ’s fixed homeowner rates had risen by 3.5 percentage points or more in the past 12 months.
“One of the biggest increases was the bank’s three-year fixed rate. It has climbed 3.85 percentage points in less than a year,” she said.
Fixed rates aren’t the only loans undergoing a major transformation with Reserve Bank of Australia Governor Philip Lowe suggesting the board would consider raising the cash rate again next month from 0, 25 percentage point or 0.50 percentage point.
If the RBA increases by 0.5 percentage points in July, a borrower with a $500,000 loan could see their repayments increase by an additional $137 per month.
“While Governor Lowe has poured cold water on suggestions that the cash rate could reach 4% by Christmas, the board is expected to continue its rapid approach to cash rate hikes over the next next six months,” Ms Tindall said.
“The RBA tears off the bandage at a low rate, and quickly.
“For many Australians, it will sting.”
Ms Tindall said borrowers need to get their finances in order in case the RBA continues to raise rates.
“Floating rate borrowers should brace for another double hike in July and for the cash rate to top 2% by Christmas – potentially well above that mark,” she said.
Ms Tindall said households with savings reserves and recent wage increases should be able to adjust to higher interest rates, but many will still struggle.
“Many families will soon struggle to balance their monthly budgets, especially if the cost of living continues to rise, as expected.”
“If you don’t think you can make ends meet by Christmas, start making changes now. Review all your regular bills and expenses to see where you can save money or possibly upgrade to a more competitive offer.
“If you don’t see a path, raise your hand and ask for help. There are experts who can provide free financial advice to help you navigate the way through these difficult financial times.