Big Four Banks Pass On Rate Hike Today; Auction Rate at 45%

Australia's four largest banks pass on the Reserve Bank of Australia's latest 0.25 percentage point increase to variable home loan rates from today, October 9. The central bank raised its cash rate to 4.60% on September 29, the fourth increase this year.

What borrowers will pay

After the rise, the big four's lowest variable rates sit between 6.24% (Westpac) and 6.50% (ANZ). Macquarie follows on October 15. Westpac and ANZ economists expect another cash-rate rise to 4.85% on November 3, though that is a forecast.

Auctions are slowing

Cotality's combined capital-city auction clearance rate fell to 45%, the lowest since July, five weeks into the spring selling season, according to ABC News. The preliminary figure for the week ending October 4 was 48.2% on 1,223 auctions, down 12.8% from the previous week and 37.5% from a year earlier.

Prices already falling

Cotality data showed national home values down 1.1% in September, the sixth straight monthly fall, leaving them 5.2% below their peak. CBA expects roughly a 9% fall from peak to trough, with the bottom sometime in 2027. Westpac forecasts a 6% fall this calendar year.

The mood

The Westpac-Melbourne Institute Consumer Sentiment Index fell 4.7% in October to 80.4, which is among the weakest readings in the survey's history. Housing sentiment was slightly better: the "time to buy a dwelling" index rose 3.4% to 88.4, which still means most respondents do not think it is a good time to buy.

What borrowers can do

Review your loan before and after today. A lower rate may be available outside the big four, and an offset account or a fixed-rate period can change your repayments.