The last of the big four banks has raised its fixed home loan rates to above 6 per cent.
Mortgage pain is surging again with Westpac becoming the last of the big four banks to hike fixed home loan rates, officially ending the era of rates starting with a “5”.
The banking giant has lifted fixed rates by as much as 0.45 percentage points, pushing its cheapest offer to 6.14 per cent — as a rapid-fire wave of increases sweeps through the market and borrowers brace for even more bad news.
Westpac no longer has a fixed mortgage rate below 6 per cent. Photo: Britta Campion.
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Looking at the big four bank mortgage rates, NAB now offers the lowest fixed rate at 6.04 per cent for a one-year term.
Rate tracking by Canstar.com.au shows 63 lenders have hiked at least one fixed rate since the last RBA decision just 16 days ago.
This includes all four of the big banks, but also Macquarie, Bendigo, ING and Bank of Queensland.
Mortgage holders have been feeling the financial squeeze amid a campaign of interest rate rises from the Reserve Bank of Australia. Picture: Monique Harmer.
The lowest fixed rate now available is 5.59 per cent from Regional Australia Bank and Pacific Mortgage Group.
Canstar.com.au data insights director Sally Tindall said Westpac was the last of the big four banks holding onto fixed rates starting with a ‘5’.
“Seeing the bank hike its lowest fixed rate to 6.14 per cent underscores just how quickly the rate cycle has shifted,” Ms Tindall said.
“With more than 60 lenders lifting fixed rates since the RBA’s March meeting, it’s clear the market is increasingly bracing for the possibility of further tightening, as global tensions start to feed into costs here at home.”
Ms Tindall said Westpac’s updated cash rate forecast pointed to more rate hikes on the horizon, reinforcing the view that even tougher times were ahead.
Canstar Data Insights director Sally Tindall. Picture: supplied.
“While further rate hikes could be just around the corner, this is not set in stone,” she said.
“If households and businesses wind back too far, the economy could easily stall, jobs could be at risk and the RBA could be forced to change course again.”
She said some borrowers could still be thinking about flipping over to a fixed rate from a variable one.
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“If that’s you, take a clear-headed approach, weigh up the risks on both sides, keeping in mind the extra conditions and restrictions that come with locking in your rate.”
The Reserve Bank raised interest rates in February by a quarter of a per cent to 3.85 per cent and again in mid-March by another to 4.1 per cent.
Roy Morgan modelling since the March increase shows 26.6 per cent of mortgage holders are now considered ‘at risk’ of mortgage stress.
Mortgage stress is on the rise as inflation continues to grow and interest rates are raised. Picture: John Appleyard.
That number is forecast to rise to 28.8 per cent in April — equivalent to 1.5 million mortgage holders.
Roy Morgan CEO Michelle Levine said that if the RBA raised rates in May by 0.25 per cent to 4.35 per cent, the share of mortgage holders ‘at risk’ would increase to more than 30 per cent.
‘However, the outbreak of conflict in the Middle East in late February, following the Israeli and US attacks on Iran, has introduced a considerable amount of uncertainty into global economic forecasts,” Ms Levine said.
“Given this uncertainty, Australia is set to face a wave of inflation prompted by soaring energy prices, or an economic slowdown due to rising energy prices impacting demand elsewhere in the economy.
“The high degree of uncertainty about how the conflict in the Middle East has introduced an additional, and volatile, variable into the decision making of the Reserve Bank over the next few months — although the Albanese Government has been quick to provide assurances that Australia is well supplied with energy over the next few weeks at least.”
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