On the morning the Reserve Bank of Australia lifted the cash rate by a quarter of a percentage point, the Commonwealth Bank moved within hours to pass that increase on to its variable home-loan customers, becoming the first of the major banks to do so. It is a small, familiar ritual of a national economy: a distant decision about money made in Sydney's central bank filters outward, one lender at a time, until it arrives at a kitchen table as a slightly larger monthly figure. For now, the other major banks have not yet shown their hand, leaving borrowers in a brief pause between knowing the rat
CBA Lifts Variable Mortgage Rates 0.25 Points After RBA Hike, First Major Bank to Move
CBA followed the RBA in full and set a date: May 20.
Mark
So what actually happened here? The RBA raised rates and a bank responded?
Mimi
Yes. The RBA lifted the cash rate by 25 basis points, and the Commonwealth Bank announced it would raise its variable home-loan rates by the same amount from May 20.
Mark
What do borrowers end up paying?
Mimi
The owner-occupier standard variable rate, for principal and interest loans, goes to 4.8 per cent. The investor rate goes to 5.38 per cent.
Luke
Worth noting that those are the standard variable rates. The report doesn't say what happens to discounted rates or to fixed-rate loans.
Mark
Fair. Why does it matter that CBA went first?
Mimi
Because it shows a full pass-through of the RBA's move, and it puts the other big banks in the position of responding.
Luke
Careful, though. Being first tells us about timing. It doesn't tell us the others will copy it.
Mimi
Right. Westpac says it is reviewing, and NAB and ANZ have said nothing yet.
Mark
Do we know what this means in dollars per month?
Luke
No. The report gives no repayment figures, so any number would be guesswork. It's also an early item, marked as more to come.
El Pulso
- The Commonwealth Bank has raised its standard variable owner-occupier rate by 0.25 points to 4.8 per cent, matching the RBA's move exactly.
- Investment-loan borrowers face the same quarter-point jump, with the variable rate climbing to 5.38 per cent.
- Westpac says it is reviewing its variable rates, while NAB and ANZ remain silent, leaving households waiting on their own lenders.
- The first mover has set the pace, and the real question now is whether the other majors will follow in full or choose a different path.
On the morning the Reserve Bank of Australia lifted the cash rate by a quarter of a percentage point, the Commonwealth Bank moved within hours to pass that increase on to its variable home-loan customers, becoming the first of the major banks to do so. It is a small, familiar ritual of a national economy: a distant decision about money made in Sydney's central bank filters outward, one lender at a time, until it arrives at a kitchen table as a slightly larger monthly figure. For now, the other major banks have not yet shown their hand, leaving borrowers in a brief pause between knowing the rate has changed and knowing what it will cost them.
The Commonwealth Bank was first to act. Within hours of the Reserve Bank of Australia raising the cash rate by 25 basis points, it announced that it would pass the full increase on to variable home-loan customers, the first of the big banks to do so.
For owner-occupiers paying principal and interest, the standard variable rate rises by a quarter of a point to 4.8 per cent, effective from May 20. Investors feel the same margin, with their variable rate reaching 5.38 per cent. CBA matched the central bank's move precisely, neither absorbing part of it nor adding to it.
The other majors had not yet committed. Westpac said it was reviewing its variable rates following the RBA decision, stopping short of confirming a rise. NAB and ANZ had announced nothing.
Borrowers with variable loans at those banks now know the central bank has moved and can see what a full pass-through looks like, but they cannot yet know what their own lenders will do. The report offered no figures on what the rise adds to a typical repayment, as it was an early item. What comes next is whether Westpac, NAB and ANZ follow, and whether any chooses a different approach.
The Commonwealth Bank moved first. Within hours of the Reserve Bank of Australia's decision to lift the cash rate by 25 basis points, CBA announced that it would pass the full increase on to its variable home-loan customers, becoming the first of the major banks to do so.
The change applies to the bank's standard variable rate for owner-occupiers who are paying principal and interest. That rate rises by one quarter of a percentage point and lands at 4.8 per cent. The bank says the new pricing takes effect from May 20.
Investors are hit by the same margin. The equivalent variable rate for investment home loans goes up by 25 basis points as well, reaching 5.38 per cent. In both cases CBA has matched the central bank's move exactly, rather than absorbing part of it or adding to it.
The rest of the big four had not settled their positions at the time of reporting. Westpac said on Twitter that it was currently reviewing its variable interest rates following the RBA's cash rate decision, which stops short of confirming a rise or its size. NAB and ANZ had not announced any pricing decisions.
That leaves a short but meaningful gap. Borrowers with variable loans at the other three banks know the RBA has moved, and CBA's announcement shows what a full pass-through looks like in practice, but they have no confirmation yet of what their own lenders will do or when any change would reach their repayments.
The source report was an early, developing item, flagged as having more to come, so it offers no figures on how much the rise adds to a typical monthly repayment. What it does establish is the sequence: the RBA acts, CBA follows in full and sets a date, Westpac reviews, and NAB and ANZ stay silent for now.
What to watch next is whether Westpac, NAB and ANZ announce matching increases, and whether any of them choose a different approach from CBA's. The answer will determine how quickly the central bank's decision reaches household mortgage repayments across the major lenders.
Citas Notables
Westpac said it was currently reviewing its variable interest rates after the RBA's cash rate decision.— Westpac, on Twitter
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Economy & Finance