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Westpac to raise variable interest rates

Australia-based banking organization Westpac has announced that it will increase variable home lending rates by 0.25% in line with the Reserve Bank's increase in the official cash rate.

Westpac’s variable home lending rates will rise by 0.25% with the first option home loan rate increasing to 7.99% and the standard variable home loan rate rising to 8.57% effective immediately.

Interest rates on selected personal deposit accounts will also increase by up to 0.30% including Westpac Reward Saver, Westpac Cash Manager and Westpac eSaver.

The bank said that for eligible customers, these assistance options 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 their entire mortgage to one of Westpac’s fixed rate loan options.

Mike Pratt, group executive for consumer financial services at Westpac, said: Westpac is not immune from the increased funding costs driven by the instability in the US sub-prime market and we continue to monitor market developments in line with the needs of all our stakeholders.