Australia’s ‘Big Four’ banks lift home loan rates to match central bank move

A combination of photographs shows people using automated teller machines (ATMs) at Australia’s “Big Four” banks – Australia and New Zealand Banking Group Ltd (bottom R), Commonwealth Bank of Australia (top R), National Australia Bank Ltd (bottom L) and Westpac Banking Corp (top L). REUTERS/Staff

Australia’s ‘Big Four’ banks will raise their home loan rates by 25 basis points this month, they said on Tuesday, passing on the full quarter-point interest rate hike announced by the central bank a day earlier.

The move is in sync with the Reserve Bank of Australia’s hike, seventh in as many months, raising the benchmark lending rate by 25 basis points to a nine-year peak of 2.85 percent, signalling more to come as it revised its inflation forecast upwards.

Commonwealth Bank of Australia, National Australia Bank and Australia and New Zealand Banking Group said the new rates will be effective Nov. 11, while Westpac Banking Corp’s rate hike will be effective Nov. 15, the lenders said in separate statements.

These banks’ shares rose on Monday after the rate hike, gaining between 0.9 percent and 1.6 percent, with the financials index advancing 1.3 percent on the day. On Tuesday, banks and the index ended largely unchanged, except Westpac that added 0.7 percent.