Last Updated: 24th May, 2021

Banks Are Raising Long-Term Interest Rates

Published by Otto Dargan on May 21, 2021

Australia’s major banks have begun raising long-term fixed interest rates in the past few weeks.

Term CBA Westpac ANZ NAB
3 year fixed 2.19% 1.88% 2.04% 1.98%
4 year fixed 2.24% 2.19% 2.24% 2.19%
5 year fixed 2.99% 2.49% 2.24% 2.49%
Data accurate as of May 21, 2021

Among the Big Four, Westpac and NAB stand at the lowest in the four-year fixed category at 2.19% for owner-occupied home loans. However, ANZ offers the lowest rate of 2.24% for the five-year fixed category, which is the same as its four-year fixed loan term offer.

The symbolic 2% threshold remains in the three-year fixed category for Westpac and NAB at 1.88% and 1.98%, respectively.

Besides the big four, at least 30 other lenders have gone higher than 2% on their longer-term home loans.

The lowest interest rate on the longer-term owner-occupied home loan is 2.10% on five-year fixed by Bank Australia.

Term Lender Rate
5 year fixed Bank Australia 2.10%
Data accurate as of May 21, 2021

These rising interest rates indicate that the banks anticipate a rise in the cost of funding with the new bond period beginning in a few months

Even with the RBA holding out the cash rate of 0.1%, the banks have begun independently increasing their interest rates for the longer term. Experts think that interest rates may yet again be adjusted in a couple of months.

So what does it mean for the borrower?

Even with a minor increase in the interest rate, you’ll pay thousands of dollars more over the life of the loan.

So, taking advantage of existing low fixed interest rates before the cost of all longer-term fixed rates goes up could be your best solution.

To find what options you have, please give us a call on 1300 889 743 or fill in our free assessment form. You can discuss the available options in detail with one of our specialist mortgage brokers.