A major Australian bank has hit investors and owner occupiers with another interest rate rise as it responds to regulatory requirements that have increased the cost of providing mortgages.
In a statement, Westpac has announced that from 20 November the variable interest rate on investment and owner occupied home loans will increase by 0.2%.
According to Westpac’s statement, the headline investment loan variable rate will increase to 5.95% (comparison rate 6.09%), while the headline owner occupied loan variable rate will increase to 5.68% (comparison rate 5.82%).
For Westpac customers who receive a Premier Advantage Package, their investment loan variable rate will move to 5.25% (comparison rate 5.62%), while owner occupiers will move to 4.98% (comparison rate 5.35%).
Westpac consumer bank chief executive George Frazis said the bank is required to hold an additional 50% of capital against its mortgage book and the decision to raise interest rates was not a knee-jerk response.
“This is a difficult decision and one that is not taken lightly. We acknowledge that it does impact customers, even in an environment where interest rates remain near historic lows,” Frazis said.
“We have sought to carefully balance the needs of our borrowers, depositors and shareholders, as well as the competitive market we operate in.”
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