Newcastle’s two big banks raise interest rates in line with RBA

Newcastle’s two big banks have both confirmed they are following the Reserve Bank of Australia’s decision to raise home loan rates by 0.25 per cent.

On Wednesday the RBA opted to increase the cash rate to 0.35 per cent, which was seen as a blow to homeowners who took out mortgages during times of record low interest rates.

The Greater Bank and Newcastle Permanent say they took time to assess a range of factors and impacts to customers before making the change.

Greater CEO Scott Morgan says 75 per cent of his customers are more than one month in advance payments.

“While passing on a rate increase is never an easy decision, overall, we believe customers are well placed to manage the change.

“Many customers have taken advantage of the record low interest rates and few repayment restrictions over the past two years and were finding greater value in paying additional money off their home loan,” Mr Morgan said.

Newcastle Permanent CEO Bernadette Inglis echoed Mr Morgans sentiments saying the decision was made after reviewing the organisation’s interest rates and the broader market.

“During the pandemic, we saw an unprecedented increase in customers who were able to build up their savings. Today, more than 90% of our home loan customers are ahead of their repayments, putting them in a good position to manage an increase in interest rates.

“We are considerate of the needs of both our home loan and deposit customers. While in recent times our home loan customers have enjoyed the lowest interest rates in history, our savings customers, many of whom are self-funded retirees, have experienced a lower level of return on their funds,” Ms Inglis said.

RBA Governor Philip Lower said on Wednesday that there are more rises to come.

Pictured: Newcastle Permanent in Newcastle. Image: Google Maps