The Reserve Bank of Australia has confirmed it is lifting the cash rate for the fifth consecutive month, with another 50 basis point increase following September’s Board meeting.
The cash rate has now surged to a seven-year high following a rapid 225 basis points increase in just 126 days, as the RBA battles to curb rising inflation.
Philip Lowe, Governor of the Reserve Bank of Australia, said that Australia’s inflation is the highest it’s been since the early ’90s and is expected to increase in the coming months.
“The Board is committed to returning inflation to the 2–3 per cent range over time. It is seeking to do this while keeping the economy on an even keel,” Mr Lowe said. ” The path to achieving this balance is a narrow one and clouded in uncertainty, not least because of global developments.
“The outlook for global economic growth has deteriorated due to pressures on real incomes from high inflation, the tightening of monetary policy in most countries, Russia’s invasion of Ukraine, and the COVID containment measures and other policy challenges in China.”
The RBA predicts that inflation will peak later this year, before declining back towards the 2–3 per cent range.
“The further increase in interest rates today will help bring inflation back to target and create a more sustainable balance of demand and supply in the Australian economy.,” Mr Lowe said. “Price stability is a prerequisite for a strong economy and a sustained period of full employment.”
To avoid paying extra interest unnecessarily, households are encouraged to assess their current financial situation, the value of their property, and the composition of their debt.
For Australians on a variable rate home loan, below is how a 50 basis point increase in the cash rate, if passed on by the lender in full, would affect monthly repayments:
| Mortgage size | 50 basis point increase to 4.5% p.a. | |
| Increase in monthly minimum repayments | Increase over the life of the loan | |
| $500,000 | +$146 | +$52,686 |
| $600,000 | +$176 | +$63,223 |
| $750,000 | +$220 | +$79,029 |
| $900,000 | +$263 | +$94,835 |
| $1,000,000 | +$293 | +$105,372 |
| Monthly repayments do not include any reduction in the mortgage balance over time. These calculations assume: An owner-occupied variable interest rate of 4.00% 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 $777 more each month than they were at the start of May, following a 225 basis point jump in just five months.
| Mortgage size | Increase in average monthly repayments since the start of May (225 basis points) |
| $500,000 | +$647 |
| $600,000 | +$777 |
| $750,000 | +$971 |
| $900,000 | +$1,165 |
| $1,000,000 | +$1,295 |
| 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. | |
As we did in May, June, July and August, 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 12 September 2022.
Compare home loans with Compare the MarketBig four bank rate rises
ANZ rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 16 September
Other info: “Effective 16 September 2022, ANZ will increase variable interest rates for home, residential investment and line of credit home loans by 0.50% p.a,” ANZ said in a statement.
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
Commonwealth Bank rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 16 September
Other info: “For those customers looking for certainty around their ongoing mortgage repayments, we will extend our 4-year fixed rate special of 4.99% p.a. (comparison rate 5.77% p.a.) for Owner Occupiers paying Principal and Interest with a home loan package, and our special 3-year Interest Only Investment Home Loan fixed package rate of 5.49% p.a. (comparison rate 6.35% p.a.),” Commonwealth Bank said in a statement. “We will also increase the interest rates for select deposit products.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
NAB rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 16 September
Other info: “The standard variable NAB home loan interest rate will increase by 0.50% p.a, effective from Friday 16 September 2022,” NAB said in a statement. “NAB’s savings and term deposit rates are continually under review.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
Westpac rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 20 September
Other info: “Home loan variable interest rates will increase by 0.50% p.a. for new and existing customers, effective 20 September,” Westpac said in a statement. “Westpac Life total variable rate with bonus interest will increase by 0.50% p.a. to 2.35% p.a., effective 20 September.
Westpac Bump Savings, for under 18 year olds, total variable rate with bonus interest will increase by 0.65% to 2.35% p.a., effective 20 September.
“Customers will be able to access a new Term Deposit offer of 3.25% p.a. for 12-23 months, effective 13 September.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
AMP rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 19 September for existing customers and 16 September for new customers
Other info: “Changes to the official cash rate is one of several factors that impacts our pricing decisions. Other factors include the direct implication of the cash rate increase to the cost of borrowing, market conditions, as well as a desire to balance the interests of homeowners and savers,” AMP said in a statement. “We are conscious of the impact of increasing rates on customers and household budgets and remain committed to offering competitive rates to our customers.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
Bank of Melbourne rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 20 September
Other info: “Following the Reserve Bank of Australia (RBA’s) decision to increase the official cash rate, Bank of Melbourne today announced a 0.50% per annum (p.a.) increase to our variable home loan interest rates, for new and existing home loans,” Bank of Melbourne said in a statement. “These variable rate changes will come into effect on Tuesday 20 September 2022.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
Bank SA rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 20 September
Other info: “Following the Reserve Bank of Australia (RBA’s) decision to increase the official cash rate, BankSA today announced a 0.50% per annum (p.a.) increase to our variable home loan interest rates, for new and existing home loans,” Bank SA said in a statement. “These variable rate changes will come into effect on Tuesday 20 September 2022.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
Bankwest rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 16 September
Other info: “Our Standard Variable Rate (SVR) for home loans will be increasing by 0.50% p.a. for new and existing customers, taking effect on 16 September 2022,” Bankwest said in a statement. “We’ve made the decision to adjust interest rates in response to the RBA’s change to the official cash rate, and due to inflationary pressures pushing up the cost of funds at institutions from which we borrow, which we use to fund loans to our customers.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
Bendigo & Adelaide Bank rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 16 September
Other info: “Bendigo and Adelaide Bank continues to carefully consider the impact rate rises have on all of our customers,” Bendigo and Adelaide Bank’s Chief Customer Officer for Consumer Banking Richard Fennell said in a statement. “We understand that rising inflation and higher rates can make it tougher for borrowers. Please remember we are here to help and have a team standing by ready to assist.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
BOQ rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 16 September
Other info: “Following the Reserve Bank of Australia’s (RBA) decision to lift the cash rate by 0.50%, BOQ will lift variable home interest rates by 0.50% per annum (p.a.) from 16 September 2022,” BOQ said in a statement. “To support savings customers, BOQ will continue to monitor rates on its popular myBOQ savings accounts to ensure they remain competitive.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
HSBC rate rise
Rate hike: TBD
Customers affected: TBD
Effective from: TBD
Other info: TBD
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
ING rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 15 September
Other info: “ING Australia announces it will increase its highest ongoing variable savings interest rate by 0.50% per annum,” ING said in a statement. “This move means eligible* new and existing Savings Maximiser customers could earn a variable interest of rate of 3.60% per annum to help boost their savings.
“There will also be a 0.50% per annum rate increases across ING Australia’s Savings Accelerator offerings (for new and existing customers). For example, customers with more than $150,000 in their Saving Accelerator will earn an interest of 2.60% per annum, up from 2.10% per annum. In addition the bank will increase all variable home loan rates for new and existing customers by 0.50% per annum.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
Macquarie rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 16 September
Other info: “Macquarie is continuing to support Australian savers by lifting interest rates across a range of deposit products by up to 0.65% p.a. following the RBA’s official cash rate decision,” Macquarie said in a statement. “Importantly, Macquarie’s savings and transaction accounts and CMA have no Macquarie fees, minimum balance or deposit requirements, no transaction conditions, and no need to lock money away for a set period to receive the interest rate.
“In line with the RBA’s cash rate decision, Macquarie will also increase variable home loan reference rates by 0.50% p.a., effective 16 September 2022.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
ME rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 17 September
Other info: “Following the Reserve Bank of Australia’s (RBA) decision to lift the cash rate by 0.50%, ME will lift variable home interest rates by 0.50% per annum (p.a.) from 17 September 2022,” ME said in a statement. “To support savings customers, ME will continue to monitor rates on its popular term deposit and savings accounts to ensure they remain competitive. If you’re a customer with us and your loan rate increases, rest assured we will write to you to advise you of your new repayment amount and when it takes effect.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
St. George rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 20 September
Other info: “Following the Reserve Bank of Australia (RBA’s) decision to increase the official cash rate, St.George today announced a 0.50% per annum (p.a.) increase to our variable home loan interest rates, for new and existing home loans,” St. George said in a statement. “These variable rate changes will come into effect on Tuesday 20 September 2022.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
Virgin Money rate rise
Rate hike: 50 basis points
Customers affected: Variable rate customers
Effective from: 16 September
Other info: “Following the Reserve Bank of Australia’s (RBA) decision to lift the cash rate by 0.50%, Virgin Money will lift variable home interest rates by 0.50% per annum (p.a.) from 16 September 2022,” Virgin Money said in a statement. “To support savings customers, Virgin Money will continue to monitor rates on its popular savings accounts to ensure they remain competitive. If you’re a customer with us and your loan rate increases, rest assured we will write to you to advise you of your new repayment amount and when it takes effect.”
Previous rate rises:
- May 2022: 25 basis points
- June 2022: 50 basis points
- July 2022: 50 basis points
- August 2022: 50 basis points
