The Reserve Bank of Australia (RBA) has hiked interest rates by another 25 basis points − marking the 12th rate rise since May last year.

RBA governor Philip Lowe announced the increase at the June Board meeting, citing persistently high inflation as a deciding factor.

“Inflation in Australia has passed its peak, but at 7% is still too high and it will be some time yet before it is back in the target range,” Lowe said in a statement.

“This further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable timeframe.

“High inflation makes life difficult for people and damages the functioning of the economy. It erodes the value of savings, hurts family budgets, makes it harder for businesses to plan and invest, and worsens income inequality.”

The latest rate hike brings the official cash rate to 4.10% − the highest in about 11 years.

It comes as Compare the Market’s latest survey revealed more than half of homeowners are considering refinancing via an online-only platform, while a quarter of borrowers would still prefer to refinance in person.

Compare the Market’s General Manager of Money, Stephen Zeller, said the majority of borrowers want to refinance to a lower rate.

“A person with a $600,000 mortgage could be paying $1,451 more each month than at the start of May 2022, so it really does pay to do your research and be prepared for that fixed rate cliff.

“Borrowers need to act fast if they want to refinance to a lower rate attached to a cashback offer.

“Some of the big banks have already announced they will be soon ceasing their cashback offers, and with the fixed rate cliff edging ever closer, other lenders have been tipped to follow suit.

“Thousands of Australians may miss out on cashback offers if they don’t act soon, with some lenders still offering up to $4,000 for your business.

“The difference between some of the advertised rates we analysed was 60 basis points.

“Therefore, a person with an owner-occupier $600,000 loan could be saving $228 per month if they were to switch from a rate of 5.99% to 5.39% − and get a cashback offer of $4,000”.

Increase in average monthly repayments

For Australians on a variable rate home loan, here’s how a 25 basis point increase in the cash rate, if passed on by the lender in full, would affect monthly repayments:

Mortgage size	25 basis point increase to 6.25% p.a.
Mortgage size	Increase in monthly minimum repayments	Increase over the life of the loan
$500,000	+$81	+$29,100
$600,000	+$97	+$34,920
$750,000	+$121	+$43,650
$900,000	+$146	+$52,380
$1,000,000	+$162	+$58,200
Monthly repayments do not include any reduction in the mortgage balance over time. These calculations assume: An owner-occupied variable interest rate of 6% p.a; principal and interest (P&I) repayments; cash rate increases are passed on in full; the loan term is 30 years; and there are no monthly fees.

Increase in average monthly repayments since May 2022

Australians with a $500,000 variable mortgage may soon be paying $1,209 more each month than the start of May 2022, following a 400 basis point jump in just 12 months.

Mortgage size	Increase in average monthly repayments since the start of May 2022 (400 basis points)
$500,000	+ $1,209
$600,000	+ $1,451
$750,000	+ $1,814
$900,000	+ $2,177
$1,000,000	+ $2,418
Reserve Bank Lenders’ Interest Rates. Monthly repayments do not include any reduction in the mortgage balance over time. These calculations assume: An owner-occupied variable interest rate of 2.86% p.a in May 2022; principal and interest (P&I) repayments; cash rate increases are passed on in full; the loan term is 30 years; and there are no monthly fees.

How high will interest rates go?

The latest increase marks the 12th rate rise sine May 2022 when the cash rate was at a low 0.35%. It’s now at 4.10% which is an 11-year high (since April 2012).

As we did in May, June, July, August, September, October, November, December, February, April and May, Compare the Market is tracking interest rate movements from some of Australia’s biggest banks and lenders. How are the banks moving? Watch this space to find out.

All banks and lenders may not be included in this list. We’ve included the lenders on our panel.

The information on this page is general only – check with your lender for further details on their interest changes and how you might be affected.

RBA rate rise June 2023: Banks pass on 25 basis point increase

Increase in average monthly repayments

Increase in average monthly repayments since May 2022

How high will interest rates go?

Big four banks rate rises

ANZ

Commonwealth Bank

NAB

Westpac

Other major banks rate rises

AMP

Bank of Melbourne

BankSA

Bankwest

Bendigo & Adelaide Bank

BOQ

ING

Macquarie

ME

St. George

Virgin Money

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Written by Megan Birot

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