Interest rate change

We recently announced a change to our home loan interest rates. We’re here to help you understand what this change might mean for you and your home loan. Please note that any advice given is general in nature only and is not based on any consideration of your objectives, financial situation or needs.

Interest rate changes

Our Standard Variable Rate (SVR) for home loans will be increasing by 0.25% p.a. for new and existing customers, taking effect on 18 May 2022.

We have made the decision to adjust interest rates in response to the RBA’s change to the official cash rate, and due to inflationary pressures pushing up the cost of funds at institutions from which we borrow, which we use to fund loans to our customers.

A detailed outline of these changes is as follows:

Standard Variable Rate

Swipe
   Current rate
(% p.a.)
New rate
(% p.a.)
Change
(% p.a.)
Owner Occupiers
(Also known as ‘Mortgage Shredder Reference Rate’)
4.75 5.00 0.25
Owner Occupiers – Interest only
(Also known as ‘Mortgage Shredder Interest Only Reference Rate’)
5.10 5.35 0.25
Investors
(Also known as ‘Investor Variable Reference Rate’ or ‘Investor Reference Rate’)
5.40 5.65 0.25
Investors - Interest Only
(Also known as ‘Investor Interest Only Reference Rate’)
5.53 5.78 0.25
Swipe

Please note: The above reference rates may not apply to your particular repayment type. The reference rate and discount margin applicable to an individual loan is specified in the loan contract. Please review your loan contract to identify which reference rate applies to you or get in touch with us via the Bankwest App, or call on 13 17 19.

What this means for you

Principal and Interest home loans

If this change affects your home loan, please be aware there is no immediate change to your repayments, as adjustments take a couple of weeks to come into effect, and you may benefit from using that time to plan for this adjustment to your financial situation.

Affected customers will shortly receive an Account Positioning Statement containing details of how their home loan repayments will be affected.

Interest Only home loans

If this change affects your home loan, the rate change comes into effect 18 May 2022 and the next interest-only repayment following that date will be calculated at the higher interest rate.

Affected customers will shortly receive an Account Positioning Statement advising of the change to their home loan repayments.

Further support

We appreciate it’s been quite a long time since interest rates have gone up and we understand this change may cause difficulties to some customers, so we are here to support you.

Customers experiencing financial challenges, due to this rate change, or other circumstances, are encouraged to get in touch with us as soon as possible, so we can understand your individual situation and work with you to identify how best to support you.

See how we can help when it comes to personal circumstances.

Find out more.

Helpful resources

We believe challenging economic conditions may be here to stay for a while, so we encourage all customers to ensure they are in the best possible financial position.

The “Manage my home loan” resource on the Bankwest website provides you with several options that you might want to consider during this time.

Want to know more?

Frequently asked questions

1

Why are interest rates increasing?

The RBA’s decision to increase Australia’s cash rate means our costs of borrowing funds goes up. These funds are, in part, what we use to provide loans to customers.

2

When will this change come into effect?

This change is effective 18 May 2022.

3

Why do banks borrow funds/ where do you borrow from?

Financial institutions have multiple sources of funding because deposits from Australian households are insufficient to cover all the lending requirements.

In order to have sufficient capital to provide customers with loans, banks obtain funding via bonds and other debt securities through large institutional banks around the world.

The RBA has provided an explainer of this funding mechanism on its website.

4

What do I do if I will have difficulty meeting my new repayments?

Customers experiencing financial challenges, due to this rate change, or other circumstances, are encouraged to get in touch with us as soon as possible, so we can understand your individual situation and work with you to identify how best to support you. Please visit our Financial Hardship Assistance page for more information.

5

Why are fixed rates so different to variable?

Fixed interest rates are priced off the Wholesale Cost of Funds, which is the cost of borrowing money from the International Money Market.

We review our fixed interest rates regularly and might make changes based on a range of indicators, including the potential for future RBA rate changes and changes in the cost of funds.

Rate decisions can also be influenced by competitor activity.

Fixed-rate products are priced off not only the official RBA cash rate, but also the cost of premiums charged for locking in the money for a period of time.

6

Will interest rates continue to increase?

We believe challenging economic conditions may be here to stay for a while, so we encourage all customers to ensure they are in the best possible financial position.

The Bankwest website provides some general strategies that might support customers.

7

Will my repayments be automatically adjusted?

If you have a periodical payment set up for the monthly minimum repayment, you don’t need to do anything, as we’ll automatically adjust the payment.

You will need to manually update your repayment amount if:

  • You have a scheduled payments set up to pay a different amount
  • You are making payments from elsewhere, like another bank
  • You manually make payments each month

Your new minimum monthly repayment amount will be outlined in your Account Position Statement, which you’ll receive in the post soon.

8

Why does it take 14 days to implement the change?

Whenever the RBA changes interest rates, we aim to announce and apply our new rates as soon as possible. We need to make systems changes to the interest rates for multiple products, which then needs to be communicated to customers across Australia via the issuing of Account Position Statement letters. This process takes us 14 days to complete.