Interest rates

ANZ and Westpac lift fixed interest rates as RBA monitors cash rate hikes

Mortgage holders have been warned of more pain after ANZ joins Westpac in the patched hike interest rate.

Yesterday Westpac increased flat rates by 0.5% for customers looking to lock in their rate.

ANZ today announced an increase of 0.9%.

ANZ raised fixed interest rates by 0.9%. (PAA)

“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%,” said Sally Tindall, research director at RateCity.

“We now have flat rates for homeowners starting with a ‘five’ and in some cases a ‘six’.”

RateCity’s analysis showed that the majority of ANZ’s fixed homeowner rates had risen by 3.5% or more in the past 12 months.

The RBA is likely to raise the cash rate several times over the next six to 12 months as it strives to bring inflation under control.
The RBA is likely to raise the cash rate several times over the next few months as it strives to bring inflation under control. (New)

One of the biggest increases was in the bank’s three-year fixed rate – it jumped 3.85% in less than a year.

Tindall said with the Reserve Bank also expected to raise the cash rate further, there would be further hardship for loan holders.

“The RBA is removing the band-aid at a low rate, and quickly. For many Australians, this is going to sting,” she said.

“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.”

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Tindall said families who feared struggling in a “more normal rate environment” should start making changes now.

“Look at all your regular bills and expenses to see where you can cut back, or possibly upgrade to a more competitive offer,” she said.

“If you don’t see a path, raise your hand and ask for help. There are experts out there who can provide you with free financial advice to help you chart a course in these difficult financial times.”