Westpac has increased its fixed-rate home loans by 0.25 to 0.35 percentage points, even as it predicts the Reserve Bank of Australia (RBA) will cut interest rates twice next year.
The bank’s lowest fixed-rate offer for a one-year term now sits at 5.49%, while rates for four- and five-year terms have risen to 5.89%. Westpac is the 12th lender to raise fixed rates in the past week, shortly after RBA Governor Michele Bullock indicated that no further cuts are expected in this cycle.
Analysis by Canstar shows only 23 lenders now offer fixed rates below 5%, down from 43 a month ago. Sally Tindall, Canstar’s data insights director, noted that the hikes reflect the RBA’s hawkish stance and suggested more increases could follow.
Despite raising rates, Westpac remains the last major bank forecasting two cash rate cuts in 2026, in contrast to Commonwealth Bank, NAB, and ANZ, which expect rates to remain steady while acknowledging the risk of increases. Market expectations after Tuesday’s RBA decision suggest a 27% chance of a rate hike in February, with the cash rate projected around 4.1% by the end of 2026.
