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The central bank decided to lift the nation’s official cash rate by 25 basis points, taking the baseline rate from 3.1 per cent to 3.35 per cent.
Variable interest rates on ANZ’s home loans will increase by the full 0.25 per cent from February 17.
The 0.25 per cent change will increase monthly repayments by $66 on an ANZ home loan of $450,000, the bank said.
In good news for savers, the bank will also pass on a 0.25 per cent increase to the ANZ Plus Save accounts for an interest rate of 4.00 per cent per annum on balances less than $250,000 from February 14.
ANZ Group Executive Australia Retail Maile Carnegie acknowledged another interest rate hike will put pressure on households already hit hard by a cost of living crisis.
“We urge anyone facing difficulties to speak with our expert teams to discuss the options available to support them and their specific circumstances as early as possible,” Carnegie said.
The latest interest rate hike will be crushing for mortgage holders even pushing some onto a home loan cliff.
Since April 2022 – when interest rates were just 0.10 per cent – repayments on a $500,000 loan have increased by $969 a month or $11,628 a year.
But the rate pain doesn’t seem to be over with RBA governor Philip Lowe forecasting future hikes as inflation continues to surge.
“The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary,” he said.
“In assessing how much further interest rates need to increase, the Board will be paying close attention to developments in the global economy, trends in household spending and the outlook for inflation and the labour market.
”The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”
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