Rate Rise Customer Hub.

The RBA is Australia's central bank. The RBA is responsible for making monetary policy decisions, including setting the cash rate, announced on the first Tuesday of every month (except January).   

Depending on a range of domestic and global factors, the cash rate may change often, or remain the same for an extended period. In this case, rates have not increased for almost 12 years.    

The RBA increases the cash rate to manage the performance of the Australian economy. One key factor they consider is the inflation rate. When inflation is on the way up, it means the cost of living goes up too and things are more expensive.   

The price of food, materials and fuel has surged in recent months along with the rising cost of new dwelling purchases by owner-occupiers.    

While the RBA’s monetary policy has been to keep the cash rate low, the central bank  is now raising rates to combat rising inflation.  

When the RBA lifts rates, the amount it costs ME to acquire the funds we lend to our customers also increases. This increased cost needs to be factored into the interest rates we charge and, sometimes, this will result in an increase to our interest rates for home loan customers.  

ME regularly reviews interest rates to ensure they balance the needs of savers and borrowers and are competitive in the market.  

For existing home lending customers on a variable rate, ME will send you a letter to inform you of the new repayment amount and when this will take effect.   

You can use ME’s Loan Repayment Calculator to calculate how your repayments may change. 

For existing home loan customers currently on a fixed rate, your loan repayment amount will not change for the duration of the period you have chosen to fix the rate of your loan.

While the interest charged on your home loan will increase from the effective date, your total repayment amount will not change for now.
 
If you're a variable rate home loan customer making principal and interest repayments, you will receive a letter in advance of us changing your repayment amount that will clearly outline your latest interest rate, new repayment amount and when it will take effect, so that you can prepare accordingly.

For our existing home loan customers currently on a fixed rate, your loan repayment amount will not change for the duration of the period you have chosen to fix the rate of your loan.

ME applies a number of ‘tests’ when assessing customers’ ability to repay a loan.   

These ‘tests’ include consideration of potential movements in interest rates over the life of the loan and evaluate a customer’s living expenses against their income. 

Along with requirements by Australia’s banking regulators, these ‘tests’ are put in place to assess if a customer can still meet repayments in a higher interest rate environment before approving a loan.  

We’re here to help. If you are having trouble making loan repayments, the best thing you can do is get in touch with our Customer Assistance Team as soon as you can once you know what your new repayments are. 

Further details on the ME’s assistance for those experiencing financial difficulty, can be found here.

The Australian Banking Association’s Financial Assistance Hub is also an excellent resource to help you understand the options that may be available if you are in financial difficulty.