GREATER Bank and Newcastle Permanent will both increase their variable home loan rates by 0.25% in step with the the Reserve Bank of Australia's decision to increase the official cash rate.
Newcastle Permanent has confirmed that both its variable home loan rates and business loan rates will increase by 0.25% per annum. from May 18, applying to new and existing customers.
The Perm will will also increase the rates "on a number of deposit products", including an increase of 0.60% p.a. on selected term deposit offers.
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Confirming the Greater Bank's decision to raise its variable home loan rates by 0.25%p.a., chief executive officer Scott Morgan said that while the rate change was imminent, the Bank took the time to assess a range of factors and impacts to customers before confirming any changes.
"It has been over a decade since Australians have seen a rising interest rate market, so it was important that we explored a range of factors beyond the change to the cash rate, including impacts on our customers and the business, before confirming the rate change," he said.
Mr Morgan said that while passing on a rate increase on home loans was not easy, overall the Bank believed customers were "well placed" to manage the change.
"Many customers have taken advantage of the record low interest rates and few repayment restrictions over the past two years and were finding greater value in paying additional money off their home loan," he said.
"We now have around 75% of customers that are more than one month in advance on repayments."
Newcastle Permanent CEO, Bernadette Inglis, said its decision was made after reviewing the customer-owned organisation's interest rates and the broader market.
"Increasing home loan interest rates is never an easy decision, however our rates have been very low for a long time our move reflects the RBA's change in the official cash rate as well as changing market conditions," she said.
"During the pandemic, we saw an unprecedented increase in customers who were able to build up their savings. Today, more than 90% of our home loan customers are ahead of their repayments, putting them in a good position to manage an increase in interest rates."
On Wednesday, the RBA announced it would increase the official cash rate by 25 points to 0.35 per cent, the first rise in almost 12 years, which will come into effect from May 10.
Mr Morgan said Greater acknowledged that there may be some customers experiencing financial difficulty at this time and encouraged anyone struggling to meet their home loan commitments to call the Bank to discuss their options.
