What’s happening and when?
Westpac recently made the difficult decision to raise our standard variable home loan interest rate by 0.45% p.a. This change took effect from 4 December 2009.
Why we raised rates above the Reserve Bank of Australia (RBA) increase.
The money we lend to our customers comes from two sources. Firstly from customers who place their deposits with us, and secondly from borrowing on the wholesale money markets.
The reality is that the cost of Westpac’s wholesale term funding isn’t just governed by the cash rate set by the RBA, and has increased substantially due to the continued pressures of the economic climate. In fact, the cost of bank funds is significantly higher than 12 months ago. We’ve absorbed a significant amount of these extra costs, but the current conditions require us to act independently of the RBA.
Why we decided to raise our standard variable home loan interest rate.
The decision to raise our rate by 0.45% wasn’t taken lightly. In looking at the amount of the increase, we wanted to be fair to our customers, at the same time ensuring we maintain a sustainable business model.
Who to talk to if you have more questions.
If you have any more questions, please talk to your local Bank Manager in branch, or call us on 1300 368 765.