Australia’s big four have been quick to follow suit in passing on the latest interest rate rise announced by the Reserve Bank.
This comes after the Reserve Bank announced a 25 basis points increase in its cash rate to 4.10% on Tuesday.
This is the second consecutive rate rise announced by the RBA in March after a split decision by the RBA’s monetary policy board in a vote of 5 to 4.
NAB announced that it will increase its variable home loan interest rates by 0.25% points from 27 March.
This is the same for the Commonwealth Bank and the ANZ Bank. However, Westpac Bank’s increase for existing and new home loan customers is to take effect on 31 March.
This means that the full interest rate rise announced by the Reserve Bank will be passed on to customers by the four major lenders.
According to the RBA, inflation increased once more in the second half of 2025, indicating increased economic capacity pressures, a more competitive labor market and sharply higher fuel prices associated with the Middle East conflict.
The board stated that despite growth uncertainty, another rate increase was warranted due to the increased risk that inflation would stay above its target band of 2 to 3% for longer than anticipated.
For households already struggling with the added cost of higher petrol, grocery and utility bills, the additional increase will simply be another strain.
Reuters reported that the move also marked a 10-month high for the cash rate, reversing two out of the three interest rate reductions made last year.
The big four banks all advised that for those customers already under pressure, it’s best to contact the bank as soon as possible to discuss hardship arrangements and possible repayment options.
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For the average home loan customer, however, the message is quite stark.
The RBA’s focus is still inflation, and the big banks are showing no hesitation in passing this pressure straight onto the home loan customer.
