The Reserve Bank of Australia (RBA) has confirmed it is lifting the cash rate for the seventh consecutive month, with another 25 basis point increase following November’s Board meeting.
The cash rate has now surged to an almost ten-year high following a rapid 275 basis points increase in just 181 days, as the RBA battles to curb rising inflation.
Philip Lowe, Governor of the Reserve Bank of Australia, said that while the RBA was committed to returning inflation to the 2-3% range over time, the road to attaining this balance “remains a narrow one”, and “is clouded in uncertainty”.
“One source of uncertainty is the outlook for the global economy, which has deteriorated over recent months”, Mr Lowe said. “Another is how household spending in Australia responds to the tighter financial conditions […] Higher interest rates and higher inflation are putting pressure on the budgets of many households”.
It comes as Compare the Market’s latest research revealed nearly 50% of Australians fear they won’t be able to afford rising mortgage and rental payments within the next 12 months.
The data also revealed an eye-watering 65% have been stressed about their finances, while just a mere 13% of Aussies felt the recently announced Federal Budget addressed the cost-of-living crisis.
While many Australian homeowners were bracing themselves for the worst, Compare the Market’s General Manager of Money Stephen Zeller said 25 basis points could be more than enough to tip borrowers into mortgage stress.
“Unfortunately, there aren’t many winners this Melbourne Cup Day with another whack to the household budget when we’re already feeling the pinch.
“It’s crucial for homeowners to plan ahead and be analytical of their rate; otherwise, people could be paying thousands of dollars in extra interest over the life of their loan unnecessarily,” Mr Zeller said.
Compare home loans with Compare the Market“To avoid getting caught out, even borrowers with a locked-in rate, who are temporarily shielded from rising interest rates, should be preparing for the future. Especially considering the RBA warned most fixed-rate loans are due to end in the second half of 2023.
“Aussies with a fixed-rate loan due to expire by the end of 2023 can expect a median increase of around $650 in their monthly repayments.
“In this market, complacency kills. It’s sink or swim, so assess your current financial situation now – the value of your property and the composition of your debt.
“Do your research to find the most cost-effective way out of this turbulent time.
“Great offers that were there yesterday are gone today, so do your research and do it fast. Advertised rates are moving quick. In the last month, we have seen some banks pass on the full 25 basis point increase to their latest offers while others are being a lot more competitive.
According to Zeller, the 25 basis point increase may not be the last of the year by the RBA, with inflation likely to peak over the New Year period.
For Australians on a variable rate home loan, below is 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 5% p.a. | |
| Increase in monthly minimum repayments | Increase over the life of the loan | |
| $500,000 | +$76 | +$27,314 |
| $600,000 | +$91 | +$32,776 |
| $750,000 | +$114 | +$40,971 |
| $900,000 | +$137 | +$49,165 |
| $1,000,000 | +$152 | +$54,627 |
| Monthly repayments do not include any reduction in the mortgage balance over time. These calculations assume: An owner-occupied variable interest rate of 5% 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. | ||
Australians with a $600,000 mortgage will likely soon be paying $964 more each month than they were at the start of May, following a 275 basis point jump in just five months.
| Mortgage size | Increase in average monthly repayments since the start of May (275 basis points) |
| $500,000 | +$803 |
| $600,000 | +$964 |
| $750,000 | +$1,205 |
| $900,000 | +$1,446 |
| $1,000,000 | +$1,606 |
| 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; 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. | |
“Households with decent buffers should be able to ride out the rate rise, but those with low liquidity buffers should be reviewing costs beyond their home loan. Get into a habit of checking your budget and re-evaluating household living costs such as energy plans and insurances. But beware of the honey trap. It’s vitally important to check the rate is competitive first before switching”.
“This might seem tedious and tiring, but it’s the best way to tackle high living expenses and get on the front foot of what could be a really challenging time into Christmas,” Mr Zeller said.
As we did in May, June, July, August, September, and October, Compare the Market is tracking interest rate movements from some of Australia’s biggest banks and lenders.
Following both of the previous two cash rate increases, these lenders were quick to pass on the full hike to their customers. Will they do the same again this time?
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.
This page was last updated 01 November 2022.
Compare home loans with Compare the MarketBig four bank rate rises
ANZ rate rise
Rate hike: 25 basis points
Customers affected: Variable rate homeowners
Effective from: 11 November 2022
Other info: ANZ will also increase the rate available to savings customers on the ANZ Plus Save account for balances less than $250,000 by 0.25%pa to 3.50%pa, effective 10 November
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
Commonwealth Bank rate rise
Rate hike: 25 basis points
Customers affected: Variable interest rate holders
Effective from: 11 November 2022
Other info: New savings rates for NetBank Saver, GoalSaver and Youthsaver customers
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
NAB rate rise
Rate hike: 25 basis points
Customers affected: Standard variable rate
Effective from: 11 November 2022
Other info: NAB’s savings and term deposit rates are continually under review. The market for savings is particularly dynamic at the moment, and as a result, NAB has made more than 40 increases across savings products since 1 May.
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
Westpac rate rise
Rate hike: 25 basis points
Customers affected: Variable rate homeowners
Effective from: 15 November 2022
Other info: Westpac Life bonus interest will increase by 0.90% p.a. to 3.50% p.a and Westpac eSaver total variable rate will increase by 0.95% p.a. to 3.50% p.a. for new customers for the first 5 months
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
AMP rate rise
Rate hike: TBA
Customers affected: TBA
Effective from: TBA
Other info: TBA
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
Bank of Melbourne rate rise
Rate hike: TBA
Customers affected: TBA
Effective from: TBA
Other info: TBA
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
Bank SA rate rise
Rate hike: TBA
Customers affected: TBA
Effective from: TBA
Other info: TBA
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
Bankwest rate rise
Rate hike: 25 basis points
Customers affected: Variable rate homeowners
Effective from: 11 November 2022
Other info: TBA
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
Bendigo & Adelaide Bank rate rise
Rate hike: TBA
Customers affected: TBA
Effective from: TBA
Other info: TBA
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
BOQ rate rise
Rate hike: TBA
Customers affected: TBA
Effective from: TBA
Other info: TBA
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
HSBC rate rise
Rate hike: TBA
Customers affected: TBA
Effective from: TBA
Other info: TBA
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
ING rate rise
Rate hike: TBA
Customers affected: TBA
Effective from: TBA
Other info: TBA
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
Macquarie rate rise
Rate hike: 25 basis points
Customers affected: Variable interest rate holders
Effective from: 16 November 2022
Other info: ANZ is forecasting the cash rate will get to 3.85 per cent by May next year
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
ME rate rise
Rate hike: TBA
Customers affected: TBA
Effective from: TBA
Other info: TBA
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
St. George rate rise
Rate hike: TBA
Customers affected: TBA
Effective from: TBA
Other info: TBA
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
Virgin Money rate rise
Rate hike: TBA
Customers affected: TBA
Effective from: TBA
Other info: TBA
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
- September 2022: 50 basis points
- October 2022: 25 basis points
