July’s RBA increase: What is your home loan rate rising to?

by | Jul 6, 2022

The Reserve Bank of Australia (RBA) met for their July meeting and made the announcement to increase the cash rate by 0.5% for the second consecutive month. The increase is the third successive as the RBA attempts to Australia’s high inflation. It’s statement cites high global inflation, the war in Ukraine and a global economy still struggling with Covid-related disruption to supply chains.

Inflation in Australia is not as high as many other countries, and the RBA concedes that much of the inflation is due to global factors, however locally there is a tight labour market, capacity constraints and the recent flooding adding pressure to prices.

The lenders are likely to pass on the full rise to their variable rates, with CBA being straight out of the blocks to announce they will be raising their variable rate by 0.5% from the 15th July.

The recent home loan rate increases are going to impact and will be felt with increases to minimum payments, but is it a natural adjustment back towards pre-Covid normality?

The recent rate increases will put the rates back to pre-Covid times. It’s worth noting that at the start of the Covid pandemic the RBA slashed rates and the government issued short term low cost facilities in the form of bonds which resulted in record low fixed rates. The cash rate in May 2019 was 1.5%, with variable rates slightly higher than they are now in the high 3s and fixed rates in a similar position. In May 2018, cash rate was at 1.5%, we were excitedly announcing a low variable rate of 3.59% in our ad.

Instagram @foxmortgages May 2018

How could today’s cash rate hike affect your mortgage?

We have included the latest updates from our lenders in the table below, we will update as we receive their notifications.

For a variable home loan of $450,000 with 25 years remaining the 0.5% increase will add an additional $116 per month to your repayments. Monthly repayments on a $450,000 home loan balance (25 years remaining) with a rate of 2.59% are $2,040 increasing rate to 3.09%, the payments will be $2,156. 

You can try our our online comparison calculator to see how much the increase adds to your repayments:

Lender changes

86 400 (now UBank)Pending
AMP0.5% increase effective 18th July
ANZ0.5% increase effective 15th July
Australian Military Bank 0.5% increase effective 27th July
Bank of ChinaPending
Bank of Queensland 0.5% increase effective 8th July
Bankwest0.5% increase effective 15th July
Commonwealth Bank0.5% increase effective 15th July
Connective AdvancePending
Connective AffinityPending
Connective EssentialsPending
Connective SelectPending
Connective SolutionsPending
Heritage Bank0.5% increase effective 27th August
ING0.5% increase effective 12th July
Keystart Home LoansPending
La Trobe FinancialPending
Macquarie Bank0.5% increase effective 14th July
ME Bank0.5% increase effective 9th July
MyState Bank0.5% increase effective 18th July
NAB0.5% increase effective 15th July
P & N Bank0.5% increase effective 26th July
St George0.5% increase effective 15th July
Suncorp0.5% increase effective 15th July
Teachers Mutual BankPending
Virgin Money0.5% increase effective 9th July
Westpac0.5% increase effective 20th July
Lender rate increase to variable loan rate

Need some help?

If you’d like some assistance then we are happy to review your current position and give you some options. To get in touch you can call the office on 08 9304 9682 or email admin@foxmortgages.com.au

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