The four biggest banks have now passed the interest rate hikes on to mortgage holders, with Commonwealth Bank the latest to join.
The Reserve Bank of Australia (RBA) announced its ninth consecutive rate hike two days ago, raising interest rates by 25 basis points.
Commonwealth Bank joined Westpac in announcing that it would broadcast the rate increase to its customers just before noon on Thursday.
ANZ and NAB already approved the rate hikes the day before.
The latest rate increase brings the official cash rate to 3.35 percent per annum.
The news will upset mortgage holders who have already been feeling the pinch of cost-of-living pressures forcing them to tighten their portfolio strings.
Variable interest rate increases on home loans will go into effect on February 17.
CBA will also increase interest rates on several of its savings products by up to 0.75 percent per year.
“We want any customer who wants to discuss their individual situation to message us in the CommBank app to explore different support options with one of our specialists,” said retail banking group executive Angus Sullivan.
“Starting that conversation early can help alleviate concerns and allow us to work together to find solutions.”
NAB said it was not passing a rate increase on to savings clients at this stage, but ANZ is giving ANZ Plus Save account holders a .25 per cent increase to 4 per cent.
Governor Philip Lowe acknowledged that some households were beginning to feel a “painful squeeze” on their budgets and warned that there are large clouds of uncertainty surrounding the future of Australia’s economy.
In a statement, Dr Lowe warned that there was a “range of potential scenarios” for the Australian economy, including how strong and when the full impact of the nine rate increases would hit families.
“The Board recognizes that monetary policy operates with a lag and that the full effect of the cumulative increase in interest rates has not yet been felt in mortgage payments,” he said.
“There is uncertainty about the timing and extent of the expected slowdown in household spending. Some households have substantial savings reserves, but others are experiencing a painful squeeze on their budgets due to higher interest rates and the rising cost of living.
“Household balance sheets are also affected by falling house prices. Another source of uncertainty is how the world economy responds to the large and rapid increase in interest rates around the world.
“These uncertainties mean there are a range of potential scenarios for the Australian economy.”
