Auswide Bank will increase interest rates on variable rate loans following the decision by the Reserve Bank of Australia (RBA) to increase the cash rate by 25 basis points to 3.85% on Tuesday.

From 11 May 2023, Auswide Bank’s variable interest rates on new and existing home, business and personal loans will increase by 0.25%p.a. Auswide Bank’s Low Rate Visa credit card will also increase by 0.25%p.a. from 1 June 2023.

Martin Barrett, Managing Director, said following their decision to keep rates on hold at their April meeting, and despite market expectations that they might pause again, the RBA had judged the inflation rate of 7% ‘as still too high’ and with a clearly stated priority ‘to return inflation to target’, this latest increase was decided.

RBA Governor, Philip Lowe, advised “inflation in Australia has passed its peak, but at 7 per cent is still too high and it will be some time yet before it is back in the target range. Given the importance of returning inflation to target within a reasonable timeframe, the Board judged that a further increase in interest rates was warranted today.”

Mr Barrett said the increase would be passed on to borrowers in full as the cost of funding the Bank’s lending program had already increased.

“We understand that meeting increased loan repayments is a concern to some customers, and while the majority of customers are continuing to meet their scheduled loan repayment, our customer service teams are available to support any borrowers in need.”