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7 February 2008

Westpac announces rate rise

Westpac today announced it was increasing interest rates on variable home and business lending and selected personal and business deposit accounts in line with the Reserve Bank's (RBA) move to increase the official cash rate by 0.25%.

Westpac will raise variable home loan rates by 0.25% with the First Option home loan rate increasing to 8.39% per annum and the standard variable home loan rate rising to 8.97% pa. Westpac will also increase the interest rate on variable rate business lending accounts by 0.25%, effective 8 February 2008.

Westpac will also move to increase selected personal and business deposit accounts by up to 0.30% including Westpac Reward Saver, Westpac Cash Manager, Westpac eSaver and Westpac Business Flexi.

"In addition to rate increases triggered by decisions of the RBA, Westpac continues to face funding pressures caused by the market volatility from the impact of the sub-prime mortgage crisis in the US. We will continue to manage these funding pressures in the interests of all our stakeholders," Westpac Acting Group Executive Consumer Financial Services Jeremy Dean said.

Over 75% of Westpac customers continue to remain ahead of their mortgage repayments. However, Mr Dean said Westpac was mindful of the impact of this additional interest rate rise on some customers.

"Westpac continues to encourage concerned customers to discuss their individual requirements with the bank to ensure they have the right mortgage product to suit their individual circumstances," he said.

Assistance options for eligible customers 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 with one of Westpac's fixed rate loan options.