On Tuesday, the Reserve Bank of Australia (RBA) raised interest rates 0.25 of a percentage point, taking the cash rate target to 2.6 per cent.
While the major lenders were slow to react to last month's rate rise, the nation's big four banks quickly announced they were passing on the increase in full to customers on variable mortgage rates.
Some of the hikes will be passed on to savers, but how much savers benefit varies from bank to bank.
Here's a breakdown of the the major banks are doing.
ANZ Bank
Mortgage rate: ANZ's variable home loan interest rates will increase 0.25 per cent per annum from Friday, October 14.
Savings rates: ANZ will increase the interest rate on its Plus Save accounts 0.25 per cent from Wednesday, October 12, taking the new maximum rate to 3.25 per cent.
However, the rate is unchanged for Progress Saver and Online Saver customers.
Commonwealth Bank
Mortgage rate: The standard variable CBA home loan interest rate will increase by 0.25 per cent per annum from Friday, October 14.
Savings rates: CBA will increase rates on a series of savings accounts, including:
- Goal Saver: Will increase 0.3 per cent to a new maximum rate of 2.4 per cent from Friday, October 14
- Netbank Saver: The standard variable interest rate will increase 0.25 per cent to 1.10 per cent, with the five-month introductory variable rate to increase 0.70 per cent to 3 per cent from Friday, October 14
- Youth Saver: The bonus interest rate will increase 0.3 per cent to a maximum rate of 2.6 per cent from Friday, October 14
- 12-month Term Deposit: Will increase 1.35 per cent to 3.35 per cent from Monday, October 10
- 18-month Term Deposit special: Will increase to 3.70 per cent from Monday, October 10.
Macquarie Bank
Mortgage rate: Macquarie's variable home loan reference rates will increase 0.25 per cent per annum from Friday, October 14.
Savings rates: Macquarie announced rate increases to a range of savings accounts, including:
- Savings account for new customers: Will increase 0.3 per cent to 4 per cent for the first four months on balances up to $250,000 from Friday, October 6
- Ongoing interest rate for savings and everyday transaction accounts: Will increase 0.45 per cent to 3.2 per cent on balances up to $250,000 from Friday, October 14.
NAB
Mortgage rate: NAB's standard variable home loan interest rate will increase 0.25 per cent per annum from Friday, October 14.
Savings rates: NAB did not announce any increases to its savings or term deposit rates after Tuesday's RBA decision.
In a media release, NAB said its savings and term deposit rates "are continually under review" and that it increased rates last month.
Suncorp Bank
Mortgage rate: Suncorp Bank will increase home loan variable rates 0.25 per cent per annum from Friday, October 14.
Savings rates: Suncorp Bank did not announce any increases to its savings nor term deposit rates after Tuesday's RBA decision.
In a media release, Suncorp said its rates "are continually under review".
Westpac Bank
Mortgage rate: Westpac Bank will increase its home loan variable rates 0.25 per cent per annum from Tuesday, October 18.
Savings rates: Westpac announced increases to deposit account interest rates, including:
- Westpac Life total variable interest rate: Will increase 0.25 per cent to 2.6 per cent from Tuesday, October 18
- Westpac Life Spend&Save Headline Rate: Will increase 0.25 per cent to 3.75 per cent from Tuesday, October 18
- Westpac eSaver: The total variable interest rate for new customers will increase 0.25 per cent to 2.55 per cent from Tuesday, October 18.
Will rates go up again?
It's very likely.
Here's what RBA Governor Phillip Lowe said after Tuesday's announcement:
"A further increase in inflation is expected over the months ahead, before inflation then declines back towards the 2 to 3 per cent range.
"The Bank's central forecast is for Consumer Price Index inflation to be around 7.75 per cent over 2022, a little above 4 per cent over 2023 and around 3 per cent over 2024."
How much higher will rates go?
The Commonwealth Bank's head of Australian economics Gareth Aird reckons rates will go up 0.25 percentage points in November and again in December, which would take the cash rate up to 3.1 per cent.
Westpac is forecasting the cash rate will peak at 3.6 per cent by February — but that's the highest peak estimate of the major banks at the moment.
How will this impact my mortgage repayments?
RateCity says the average owner-occupier on a variable rate could be paying 6.36 per cent interest by early next year.
A RateCity analysis shows the average borrower with a $500,000 mortgage could be paying an extra $687 per month since the rates started rising back in May.
That's based on an owner-occupier paring principal and interest for 25 years left on their $500,000 mortgage.
For people with a $750,000 mortgage, that increase from May to October is $1,030 and it jumps to $1,374 for people with a $1 million mortgage.
