Australian mortgage holders are facing mounting pressure after all four major banks lifted their variable home loan rates above 6 per cent, following the Reserve Bank of Australia’s latest interest rate increase.

The rate changes took effect on Friday, with Westpac increasing its variable rate to 6.49 per cent, Commonwealth Bank to 6.59 per cent and NAB to 6.54 per cent. ANZ now has the highest variable rate among the Big Four at 6.75 per cent.

The latest increases follow the RBA’s fifth cash rate rise this year, taking the official rate to 4.85 per cent, its highest level since late 2008.

According to comparison website Canstar, there are currently no variable home loan rates below 6 per cent, with Pacific Mortgage Group offering the lowest rate listed at 6.14 per cent.

Canstar director Sally Tindall said variable mortgage rates below 6 per cent would soon be “relegated to the history books”, as reported by Australian Broker.

The impact of higher borrowing costs is also becoming evident in the financial position of Australian households.

Commonwealth Bank has reported that the proportion of customers at least 90 days behind on their home loan repayments reached 0.8 per cent in the September quarter, a six-year high. The figure was 0.64 per cent in September 2019.

The bank said home loan arrears increased by seven basis points during the quarter, amid higher inflation and interest rates.

CBA chief executive Matt Comyn told News24 taht households and businesses continued to face uneven pressure from rising living costs and borrowing costs.

“While economic growth is slowing, the Australian economy remains resilient, supported by low unemployment and a strong public infrastructure and private investment pipeline,” Comyn said.

Personal loan arrears at the bank also increased to 1.66 per cent, compared with 1.43 per cent recorded seven years earlier. Credit card arrears remained unchanged at 0.73 per cent.

The latest figures come as inflation remains elevated. Australian Bureau of Statistics data showed headline inflation reached 4.3 per cent in the year to September.

The property market is also showing signs of strain. A report by Cotality found dwelling values across Australia’s capital cities fell for the seventh consecutive month in October, amid higher interest rates and cost-of-living pressures.

Opposition Leader Angus Taylor blamed the Federal Government’s spending for the latest interest rate increase, accusing it of spending like “drunken sailors” following the RBA’s November 3 decision.

With all four major banks now charging variable home loan rates above 6 per cent, borrowers are facing higher repayment costs at a time when household budgets are already under pressure.

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