July rate hikes kick in, but borrowers may not feel the pain for weeks – RateCity



Following the Reserve Bank’s double rate hike, big banks CBA, NAB, and ANZ have lifted all their variable mortgage rates by 0.5 percentage points, with Westpac increasing its rates from next Wednesday.

As a result, the average variable borrower will have seen their rate rise by 1.25 percentage points since the start of May.

That means someone with a $500,000 mortgage, with 25 years remaining, will see their repayments increase by an estimated $333 in total across the three hikes, RateCity.com.au said.

While variable rate borrowers with loans with CBA, NAB, and ANZ will be charged a higher interest rate starting today, it will take weeks for their monthly repayments to rise.

In fact, the increase in monthly repayments many of these customers are currently seeing resulted from the May hike.

This is because banks typically give 20 to 32 days’ notice before lifting their monthly repayments, despite charging their customers the higher rate from the effective date.

Even then, the increase to their monthly repayment might not take effect for another few weeks, depending on when they are due.

RateCity.com.au compiled the big four banks’ minimum notice periods for rate rises for principal and interest customers:

  • CBA: at least 20 days’ notice from the date of customer’s notification letter.
  • Westpac: at least 30 days’ notice from the date of letter.
  • NAB: at least 32 days’ notice from the date of letter.
  • ANZ: at least 30 days’ notice from the date of letter.

Sally Tindall, RateCity.com.au research director, said while RBA’s “rapid fire rate hikes have rattled consumer sentiment for months,” it’s yet to show up in official retail spending data.

“Part of this could be because homeowners have only just started paying extra on their mortgage as a result of the first hike back in May,” Tindall said. “The latest surveys from Westpac and ANZ show that confidence is in freefall on the back of rising inflation and interest rates. However, people are still opening up their wallets at the shops, although this is unlikely to last for long.”

According to the ABS retail spending data for May, there was a monthly rise of 0.9%, up 10.4% year-on-year, but NAB is now predicting a slight decline in June.

“While it’s great to see the banks giving their customers plenty of notice, any borrowers with their heads deliberately in the sand might get a shock when the higher mortgage repayments start coming out of their bank accounts,” Tindall said. “If you’ve got a variable mortgage, pay close attention to the letters and emails your bank sends you. They should have your new mortgage repayments clearly listed, and the effective date. People with direct debits set up should make sure they’ve got enough money in their account to clear it. We expect the new lowest rate to be 2.84% once all the hikes are announced, so if you suspect you’re overpaying then now is the time to refinance before rates keep climbing,” she said.

Here’s the big four bank home loan rates, post-July hike, as compiled by RateCity.com.au:


Lowest variable rate

Discounted variable rate

Standard variable rate






3.14% for 2 yrs. then 3.54%











Notes: Home loan rates are for owner-occupiers paying principal and interest, LVR restrictions may apply. CBA, NAB, ANZ rates effective July 15, Westpac rates effective July 20.