After two days of "radio silence", Australia's "big four" banks have finally confirmed they will lift interest rates on variable mortgages by 0.5 percentage points.
Commonwealth Bank was the first of the "big four" banks to pass on the Reserve Bank's latest rate hike on Thursday morning, followed by ANZ and Westpac, then NAB.
The RBA lifted its cash rate target by 0.5 percentage points on Tuesday, taking the new rate to a six-year high of 1.85 per cent.
It was no surprise that the commercial banks would pass on the RBA's rate increase to their borrowers. However, the surprising aspect is how uncharacteristically slow the banks have been in making such announcements in the past couple of days.
Australia's fifth-largest lender, Macquarie Bank, was the first bank to lift its variable rates within hours of the RBA's decision on Tuesday.
This was followed on Wednesday by ubank — an NAB subsidiary — announcing it would lift its savings rates by 0.5 percentage points in September.
Delay in being the first mover
"This kind of waiting game is unusual, but not unprecedented," said Sally Tindall, the research director of RateCity.
Ms Tindall said the last time there was "radio silence" like this from the banks was around 12 years ago.
"Back in 2010, three of the big four banks took between eight and 10 days to make announcements following the 0.25 percentage point RBA hike on 2 November."
“The delay could be a worrying sign for savers. It's possible the banks are still mulling over whether they will pass on the full hike to all their savings customers."
"However, the big four banks could just be playing a game of chicken to see which one of them moves first."
CBA increased its standard variable rates for its borrowers by 0.5 percentage points on Thursday morning. This brings is lowest variable rate to 3.79 per cent.
In a surprise move, CBA also decided to cut its lowest four-year fixed rate to 4.99 per cent (a drop of 1.6 percentage points). But it only applies to owner-occupiers paying principal and interest.
The bank also said it would increase the rate on "select savings products", meaning it has not passed on the RBA's full rate hike to all savers.
Similarly, ANZ, Westpac and NAB said they would increase all their variable mortgage rates by 0.5 percentage points. But only some of their savings account rates will increase by that margin.
The "big four" banks are offering term deposits that pay an interest rate of 3 per cent.
However, customers will need to lock their money with the bank for 11 to 23 months — during which the RBA is expected to lifts its cash rate target even further.
The Federal Treasurer Jim Chalmers has been pressuring banks to pass on the RBA's interest rate rises, in full, to savers who have had record low returns over recent years.
Shortly before the RBA's decision on Tuesday, Dr Chalmers said the big banks should do the fair thing and apply higher interest rates to customers with savings accounts.
"There needs to be some positives out of this," he said.
"For savers, they need and deserve higher interest rates on their savings.
"So I will have the opportunity to convey to the banks directly my expectation that these interest rate rises get passed on to savers."
