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12 November 2007

Westpac raises variable interest rates following RBA increase

Westpac today announced it would increase variable home lending rates by 0.25% in line with the Reserve Bank's increase in the official cash rate.

Westpac's variable home lending rates will rise by 0.25% with the First Option home loan rate increasing to 7.99% and the standard variable home loan rate rising to 8.57% effective today.

Interest rates on selected personal deposit accounts will also increase by up to 0.30% including Westpac Reward Saver, Westpac Cash Manager, and Westpac eSaver.

At this stage, Westpac has decided not to pass on to variable rate mortgage customers increased funding costs triggered by the tightening in global liquidity markets.

"Westpac is not immune from the increased funding costs driven by the instability in the US sub prime market and we continue to monitor market developments in line with the needs of all our stakeholders," Westpac's Group Executive Consumer Financial Services Mike Pratt said.

Mr Pratt encouraged Westpac customers concerned about the latest interest rate rise to discuss their individual circumstances with the bank as there were a number of assistance options available.

For eligible customers, these assistance options include a repayment holiday, interest only repayments, consolidated loans, fixed payment loans and parental leave arrangements. Customers looking for interest rate certainty could also consider locking in part or all of their mortgage to one of Westpac's fixed rate loan options.