Westpac is the first major bank to increase interest rates on its fixed-rate home loans as well as investment loans. Market analysts expect the other banks to follow suit.  

Owner occupiers and property investors who take a Westpac five-year fixed-rate mortgage from this week onwards will see an increase of 0.6% percentage points to 4.59% in the interest rate, the biggest of the increases.

Those who already have a Westpac fixed-rate loan will be unaffected by the increases.

Based on the new figures, property investors who take a Westpac five-year mortgage from this week, borrowing $450,000, will pay an extra $158 a month in repayments over 30 years.

One and four-year fixed-rates for both owner occupiers and property investors will remain unchanged. Rates on two and three-year terms for owner occupiers and property investors will rise by up to 0.3 percentage points.

The changes also apply to Westpac’s subsidiary St. George. Separate increases will apply to another Westpac subsidiary, RAMS.

Many smaller lenders have announced increases in their fixed rates over the past two weeks. ME Bank has increased the variable rate for new customers on its owner occupier flexible member package as well as some of its fixed rates.  

UBank, which is owned by National Australia Bank, has also increased its variable rates by 0.1 percentage points, affecting new and existing mortgage holders from December 2 onwards, though its fixed rates remain unchanged.    
 

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