One of Australia’s big four banks has reacted to the Reserve Bank of Australia’s rate hike.
The RBA on Tuesday raised interest rates by another 50 basis points from 1.85 percent to 2.35 percent – the highest level since December 2014.
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Now NAB has announced that it is increasing its variable rate home loan rate by 0.5 percent.
NAB Group Executive for Personal Banking, Rachel Slade, encouraged anyone with questions or concerns about interest rate changes to contact their bank.
“Talking to your bank early is so important to staying on track financially,” Slade said.
“When customers speak to our NAB Assist team early, we see that 90 percent of our customers are back on their feet within 90 days.”
The new variable rates for home loans come into effect on September 16.
NAB is the first of Australia’s major banks to pass RBA rates, but more are expected to follow.
The RBA’s decision will result in an additional $144 increase in monthly repayments for the average adjustable-rate borrower.
Reserve Bank of Australia Governor Phillip Lowe said on Tuesday he was “committed to bringing inflation back into the 2% to 3% range over time”.
“Inflation in Australia is at its highest since the early 1990s and is expected to rise further in the coming months.
“Global factors explain much of the rise in inflation, but domestic factors also play a role.”
Given that there have already been four rate hikes this year, that translates to a total increase of more than $600 in monthly repayments since May for the average borrower.
“That’s a massive amount of extra money to raise month-to-month,” said Sally Tindall, research director at RateCity.
The rate hike could mean even more pressure when Australians are already grappling with a cost of living crisis, Tim Lawless, head of research at financial services firm CoreLogic, told 7NEWS.com.au.
“Obviously this means that households will have to devote more of their income to servicing debt at a time when the cost of basic necessities is also rising fairly rapidly due to inflation,” he said.
“So we have to expect that the budget balance sheets will be more heavily burdened.”
https://7news.com.au/lifestyle/personal-finance/first-big-bank-passes-on-rbas-interest-rate-rise-c-8182263 NAB Bank Rates: First major bank to pass on RBA rate hike