Sydney, February 5, 2026, 16:49 (AEDT) — Market closed.
- Starting Feb. 13, Westpac increased savings rates but maintained low base rates for customers who don’t meet monthly conditions
- Mortgage repricing is set for Feb. 17, following this week’s RBA cash-rate hike
- Attention shifts to Westpac’s first-quarter update on Feb. 13 for hints on margin and funding
Westpac Banking Corp shares (WBC.AX) edged up 0.05% to close at A$39.91 on Thursday, showing little reaction after the bank raised rates on several savings accounts. The stock fluctuated between A$39.54 and A$40.15, holding close to its 52-week peak of A$41.00.
Westpac announced Thursday that its Life savings account total variable rate will increase to 4.50% per year, up from 4.25%, starting Feb. 13. The base rate remains at 0.10% for those who don’t meet the monthly bonus criteria. Meanwhile, the “Spend&Save” headline rate targeting 18–34-year-olds rises to 5.25%. Westpac
The Reserve Bank of Australia raised the cash rate to 3.85% on Tuesday, marking its first increase in two years. Commonwealth Bank, Westpac, NAB, and ANZ all announced a 25 basis point hike in mortgage rates—that’s 0.25 percentage point—as investors keep an eye on the impact on net interest margins, the spread between earnings on loans and costs on deposits.
Westpac announced earlier this week it will raise variable home loan interest rates by 0.25% per annum for both new and existing customers starting Feb. 17. “We understand that an interest rate increase may add pressure to household budgets,” said consumer chief executive Carolyn McCann. Westpac
Canstar data insights director Sally Tindall said the savings hike will benefit some customers, but warned about the fine print tied to bonus rates. “It’s great to see it’s broadly done the right thing for its savers,” she said, while highlighting that base rates on certain accounts remain close to zero if conditions aren’t met. Canstar
The broader market slipped, with the S&P/ASX 200 closing 0.43% lower on Thursday.
Westpac is promoting term deposits with a 12-month “special offer” rate of 4.35% for existing customers who open or renew online, starting Feb. 3. Westpac
But the fight for deposits can backfire. If competitors push savings rates even higher, funding costs surge, eating into any gains from increased mortgage rates. The worst-case scenario? More arrears as borrowers struggle with steeper repayments.
Rate expectations are quietly changing behind the scenes. Australia’s 3‑year bond yield hovered near 4.32% on Thursday. Debt markets have begun factoring in another RBA hike by May, keeping a close eye on the quarterly inflation numbers set for April 29.
Traders will be watching closely in the next session to see if other major banks follow Westpac’s lead on savings rates, potentially shifting expectations around bank margins. Key dates are coming up fast: Westpac’s new deposit rates kick in on Feb. 13, with mortgage repricing set for Feb. 17.
The key trigger arrives next week. Westpac will release its first-quarter results on Feb. 13, with investors eager for clues on margin pressure, deposit composition, and credit quality.
