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Commonwealth Bank and NAB have raised fixed rates

Another major Australian bank raises its fixed interest rates from TODAY amid warnings the Reserve Bank will hammer mortgage holders

  • National Australia Bank joined Commonwealth Bank in lifting fixed lending rates
  • Economists expect the Reserve Bank to raise interest rates by 0.5 percentage points in July

Another major bank has now raised its fixed mortgage rates, a clear sign that official interest rates will rise at their fastest pace in nearly three decades.

National Australia Bank joined the Commonwealth Bank on Friday in lifting their flat rates.

Economists at Australia’s largest banks widely expect the Reserve Bank of Australia to raise cash interest rates by 0.5 percentage points on July 5.

This would push the spot interest rate to a three-year high of 1.35 percent from the existing level of 0.85 percent.

A rate hike in July, following the hikes in May and June, would already mark the fastest rate of increases in a short period of time since late 1994.

Several more RBA rate hikes are expected in 2022 to tackle 5.1 percent inflation — the worst in two decades.

NAB’s one-year fixed rate rose 1.10 percentage points to 4.69 percent, from 3.59 percent.

National Australia Bank joined Commonwealth Bank on Friday in lifting their flat rates

National Australia Bank joined Commonwealth Bank on Friday in lifting their flat rates

NAB increases fixed rates

A YEAR: 1.10 percentage points up to 4.69 percent, from 3.59 percent

TWO YEARS: 1 percentage point up to 5.59 percent from 4.59 percent

THREE YEARS: 0.8 percentage point up from 4.99 percent to 5.79 percent

FOUR YEARS: 0.8 percentage point up from 5.39 percent to 6.19 percent

FIVE YEARS: 0.8 percentage point up from 5.49 percent to 6.29 percent

NAB’s two-year fixed mortgage rate rose by one percentage point from 4.59% to 5.59 percent.

The Commonwealth Bank raised its fixed mortgage rate by a staggering 1.4 percentage points on Thursday for both owner-occupiers and investors seeking a one- to five-year term as it warned of another big hike in Reserve Bank rates in July.

The CBA’s lowest one-year fixed interest rate rises from 3.59 percent to 4.99 percent.

The five-year interest rate rose from 5.29 percent to 6.69 percent.

A RateCity analysis found that more than 70 banks had raised at least one fixed rate in the past month.

As of this week, no lender in Australia offers mortgage rates of less than two percent.

Before the Reserve Bank raised rates in May, Canstar listed 68 products at that low rate, down from 193 a year ago.

Canstar finance expert Steve Mickenbecker said it’s unlikely Australians will ever see a mortgage rate of less than two percent again in their lifetime.

The Commonwealth Bank raised its fixed mortgage rates on Thursday for both owner-occupiers and investors seeking a one- to five-year term, as it warned of another big hike in Reserve Bank rates in July.  The CBA's lowest one-year fixed interest rate rises from 3.59 percent to 4.99 percent

The Commonwealth Bank raised its fixed mortgage rates on Thursday for both owner-occupiers and investors seeking a one- to five-year term, as it warned of another big hike in Reserve Bank rates in July. The CBA’s lowest one-year fixed interest rate rises from 3.59 percent to 4.99 percent

Commonwealth Bank Fixed Rate Increase

A YEAR: 1.4 percentage points up from 3.59 percent to 4.99 percent

TWO YEARS: 1.4 percentage points up from 4.39 percent to 5.79 percent

THREE YEARS: 1.4 percentage points up from 4.99 percent to 6.39 percent

FOUR YEARS: 1.4 percentage points up from 5.19 percent to 6.59 percent

FIVE YEARS: 1.4 percentage points up from 5.29 percent to 6.69 percent

“The Reserve Bank’s cash interest rate hikes in May and June have ended an era of below two percent housing loan interest rates, something we may never see again,” he said. Variable interest extra home loan by 0.15 percentage point, with the lowest discount rate going from 2.94 percent to 2.79 percent.

The more popular variable CBA rate, with less severe credit card restrictions, is also down 0.15 percentage points from 3.04 percent to 2.89 percent.

Like its rival Westpac, Commonwealth Bank expects a 0.5 percentage point increase at its July 5 RBA meeting, bringing the spot rate to 1.35 percent – the highest level since June 2019.

The 0.5 percentage point increase in June marked the first half percentage point increase since February 2000.

The 0.25 percentage point increase in May was the first increase since November 2010.

With another rate hike in July, spot rates would rise for the first time in nearly 12 years for three months in a row.

An increase of half a percentage point next month would also mean that home borrowers would have absorbed 1.25 percentage points of RBA rate hikes in just three months.

This would be the strongest increase in such a short period of time since late 1994, during the early days of the Internet.

What a 0.5 percentage point rate hike in July means for borrowers

$500,000: $136 up from $2,079 to $2,215

$600,000: $163 up from $2,495 to $2,658

$700,000: $191 up from $2,910 to $3,101

$800,000: $218 up from $3,326 to $3,544

$900,000: $245 up from $3,742 to $3,987

$1,000,000: $273 up from $4,157 to $4,430

Monthly repayments based on Commonwealth Bank’s popular floating rate, which rises from 2.89 percent to 3.39 percent as the Reserve Bank’s spot rate rises from 0.85 percent to 1.35 percent in July

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