Macquarie Bank said on Tuesday it will pass on the Reserve Bank of Australia's latest quarter-point rate increase in full to variable home loan customers, one of the first major lenders to confirm repricing after the board lifted the cash rate target to 4.60 percent.
What the RBA decided
The monetary policy board announced the 25-basis-point move after its September meeting, taking the cash rate to its highest level since 2011. The decision was unanimous. In its statement, the Reserve Bank said inflation remains above target and that growth in aggregate demand must stay subdued for a time to bring price pressures down.
Governor Michele Bullock told reporters the board did not take the hike lightly, acknowledging that higher repayments would hit households already facing slower growth and a labour market that has softened. She declined to promise that Tuesday's move would be the last, saying the board would watch incoming data and could raise rates again if needed.
Macquarie's timetable
Macquarie, which ranks as Australia's fifth-largest bank by several measures, said variable reference rates for owner-occupier and investor mortgages would increase by 0.25 percentage points. The bank said the new rates would take effect on 15 October for existing variable borrowers, giving customers a short window before statements reflect the change.
For a borrower with a 600,000 Australian dollar loan and 25 years remaining on a variable rate, a full 25-basis-point pass-through adds roughly 90 dollars to monthly repayments, depending on the starting rate and fee structure. Fixed-rate customers are unaffected until their fixed term ends unless they hold a split loan.
Why lenders move quickly
Banks fund much of their mortgage books through deposits and wholesale markets. When the cash rate rises, their marginal funding costs typically rise with it. Passing the increase through to variable mortgages protects net interest margins, though competition and political scrutiny often shape how fast each lender acts and whether they absorb a portion of the move.
Tuesday's Reserve Bank decision was widely expected after inflation readings remained sticky and after three earlier hikes this year. Financial markets had priced a follow-up increase before the end of the year even before Bullock's post-meeting comments left room for another move at the board's November sitting.
What borrowers should check
Home owners with variable loans should read the notice from their lender for the effective date and the new annual percentage rate. Offset account balances still reduce interest charged on the linked loan, but the rate applied to the remaining principal will step up once repricing hits.
Customers comparing products should look at comparison rates, fees, and whether a fixed portion of the loan is still locked. Credit card and personal loan rates are set separately; Tuesday's move does not automatically reprice every consumer credit product on the same day.
Macquarie did not announce changes to its savings account rates in the same statement. Other major banks are expected to publish their pass-through decisions in the coming days, setting the template for household budgets heading into the spring quarter.