How Australia's Big Four Banks Responded to the March 2026 Rate Hike: A Borrower and Saver Comparison
The March 2026 Rate Hike Lands
On Tuesday 17 March 2026, the Reserve Bank of Australia raised the cash rate by 25 basis points to 4.10%. The decision was tight, passing 5-4, reflecting genuine division on the board about whether the economy could handle another increase.
Within hours, Australia’s four biggest banks began announcing their responses. As always, the full 0.25% increase was passed on to variable rate mortgage holders. But the details matter enormously. When the changes take effect, how savings rates moved, and what’s on offer for new versus existing customers can mean differences of thousands of dollars per year.
This guide breaks down exactly how CBA, NAB, Westpac and ANZ responded, what it means for your mortgage or savings, and the practical steps you can take to make sure you’re on the best possible deal.
How Each Bank Responded: Mortgage Rates
NAB: First to move
NAB was the first of the big four to announce its response, confirming a full 0.25% increase to variable home loan rates effective 27 March 2026.
NAB’s group executive for personal banking, Ana Marinkovic, acknowledged the pain: “We know another rate increase will be challenging for many Australians, particularly in the context of ongoing cost-of-living pressures.”
NAB noted that many of its customers had built repayment buffers by paying more than the minimum during previous rate cut periods. However, the bank also acknowledged this “won’t be the case for everyone” and encouraged struggling borrowers to contact the bank for hardship support.
ANZ: Full pass-through
ANZ followed with a full 0.25% pass-through to variable mortgage rates. The bank’s standard variable rate for owner-occupiers moved to approximately 8.09% p.a., though heavily discounted rates for qualifying new borrowers sit significantly lower.
ANZ also raised its investor variable rates by the full 0.25%, bringing investor rates to approximately 8.49% p.a. on the standard variable product.
Westpac: Full pass-through with savings boost
Westpac passed on the full increase to variable home loans, effective 27 March 2026, but also made notable changes to its savings products (more on that below). Westpac’s standard variable rate for owner-occupiers moved to approximately 8.13% p.a.
CBA: Full pass-through, savings changes pending
The Commonwealth Bank confirmed a 0.25% increase to variable home loans. CBA also announced increases to several savings products, though the full details of savings rate changes were still being finalised at the time of writing.
Comparative table: Big four variable mortgage rates (March 2026)
| Bank | Owner-Occupier SVR | Investor SVR | Best Discounted Rate (New, O/O) | Effective Date |
|---|---|---|---|---|
| CBA | ~8.10% | ~8.50% | ~6.39% | Late March |
| NAB | ~8.07% | ~8.47% | ~6.44% | 27 March |
| Westpac | ~8.13% | ~8.53% | ~6.49% | 27 March |
| ANZ | ~8.09% | ~8.49% | ~6.44% | Late March |
Rates are indicative and vary based on LVR, loan amount, and individual circumstances. “Best discounted rate” refers to advertised rates for new owner-occupier customers with LVR below 60-70%. SVR = Standard Variable Rate.
Key takeaway: The differences between the big four on headline variable rates are marginal (within 0.06%). The real savings come from negotiating a competitive discounted rate, something a mortgage broker can help with.
How Each Bank Responded: Savings Rates
Here’s where the responses diverge more meaningfully. Banks are competing harder for deposits in the current environment, and the savings rate increases weren’t uniform.
Westpac: The standout for younger savers
Westpac’s savings response was the most detailed and, for younger customers, the most generous:
- Westpac Life (standard): Variable bonus rate increased 0.25% to 4.65% p.a. Base rate unchanged at 0.10% p.a. Total available rate: 4.75% p.a. (conditions apply).
- Westpac Spend&Save (18-34 year olds): Additional 0.75% bonus rate maintained. Total headline rate increased to 5.50% p.a. (conditions apply).
The Spend&Save product is notable because it offers one of the highest rates available from a big four bank, though it’s limited to customers aged 18 to 34 and requires five eligible purchases per month.
CBA: Competitive across multiple products
CBA announced increases across several savings products, including its GoalSaver and NetBank Saver accounts. The bank’s NetBank Saver offers a competitive introductory rate for new customers, while GoalSaver rewards consistent monthly deposits.
NAB: iSaver and reward saver updates
NAB increased rates on its iSaver and Reward Saver products. The Reward Saver requires a deposit of at least $10 per month to qualify for the bonus rate, making it accessible for most savers.
ANZ: Progress Saver adjustments
ANZ updated its Progress Saver and ANZ Save products. The Progress Saver requires a monthly deposit of at least $10 and no withdrawals to earn the bonus rate.
Comparative table: Big four savings rates (March 2026)
| Bank | Product | Base Rate | Bonus Rate | Total Rate | Key Condition |
|---|---|---|---|---|---|
| Westpac | Spend&Save (18-34) | 0.10% | 5.40% | 5.50% | 5 purchases/month |
| Westpac | Life | 0.10% | 4.65% | 4.75% | $2,000 deposit/month |
| CBA | GoalSaver | 0.15% | ~4.55% | ~4.70% | Deposit monthly, no withdrawals |
| CBA | NetBank Saver | ~4.50% intro | - | ~4.50% | Introductory (5 months) |
| NAB | Reward Saver | 0.15% | ~4.55% | ~4.70% | $10 deposit/month |
| ANZ | Progress Saver | 0.10% | ~4.55% | ~4.65% | $10 deposit, no withdrawals |
Rates are indicative and subject to change. Conditions apply. Check each bank’s website for current offers.
Key takeaway: If you’re under 35, Westpac’s Spend&Save at 5.50% is hard to beat from a major bank. For everyone else, the big four savings rates cluster around 4.65% to 4.75%, which is decent but well below what smaller banks and online-only institutions offer (some exceeding 5.50% unconditionally).
The “Loyalty Tax”: Why Existing Customers Pay More
One of the most persistent issues in Australian banking is the gap between what new and existing customers pay. ASIC’s mortgage pricing inquiry found that existing customers pay, on average, 0.30% to 0.50% more than new customers at the same bank.
Over the life of a loan, this “loyalty tax” adds up dramatically:
| Loan Amount | Rate Gap | Extra Cost Per Year | Extra Cost Over 10 Years |
|---|---|---|---|
| $500,000 | 0.30% | $1,500 | $15,000 |
| $600,000 | 0.40% | $2,400 | $24,000 |
| $750,000 | 0.50% | $3,750 | $37,500 |
How to fight the loyalty tax
Step 1: Find out what you’re actually paying. Log into your banking app or call your lender to confirm your current variable rate. Compare it against the best advertised rate for new customers at the same bank.
Step 2: Call and negotiate. Banks have retention teams specifically authorised to offer better rates to customers who call to negotiate. Be direct: “I’ve seen that new customers are being offered X%. I’d like the same rate, or I’ll need to consider refinancing.”
Step 3: Get competing offers. Before you call, get quotes from two or three other lenders (or work with a mortgage broker who can do this for you). Having a concrete competing offer strengthens your negotiating position enormously.
Step 4: Be prepared to switch. If your current bank won’t match or come close to competing offers, refinancing is straightforward. Most lenders cover discharge and settlement costs for loans above a certain size. The process typically takes two to four weeks.
Fixed Rates: Should You Lock In Now?
The current fixed rate landscape
Fixed rates have been climbing ahead of the RBA’s March decision as lenders priced in expectations of further hikes. Here’s a snapshot of indicative 2-year and 3-year fixed rates from the big four:
| Bank | 2-Year Fixed (O/O) | 3-Year Fixed (O/O) | 5-Year Fixed (O/O) |
|---|---|---|---|
| CBA | ~6.29% | ~6.19% | ~6.39% |
| NAB | ~6.34% | ~6.24% | ~6.44% |
| Westpac | ~6.39% | ~6.29% | ~6.49% |
| ANZ | ~6.34% | ~6.24% | ~6.44% |
Rates indicative only, vary by LVR and loan size.
The fixing dilemma
The decision to fix depends on your view of where rates are headed and your appetite for certainty versus flexibility.
Arguments for fixing now:
- All four major banks are forecasting another hike in May, taking the cash rate to 4.35%.
- Current fixed rates might look attractive if the cash rate climbs further.
- Certainty of repayments helps with budgeting in uncertain times.
Arguments against fixing:
- If the Middle East conflict de-escalates and oil prices fall, the RBA may reverse course quickly.
- Fixed rates already price in expected future hikes, so you’re not necessarily saving money.
- Break costs can be significant if rates drop and you want to exit early.
- You lose the flexibility to make extra repayments (most fixed loans cap additional payments at $10,000 to $20,000 per year).
A middle-ground approach: Consider splitting your loan, fixing a portion (say 50% to 70%) for budget certainty and keeping the rest variable for flexibility and the ability to make extra payments. This is one of the most common strategies recommended by mortgage brokers in the current environment.
Term Deposits: The Quiet Winner
With the cash rate at 4.10%, term deposit rates have surged. For savers who don’t need immediate access to their funds, term deposits now offer compelling returns:
| Term | Big Four Range | Best Market Rate (March 2026) |
|---|---|---|
| 3 months | 3.80% - 4.10% | ~4.70% |
| 6 months | 4.20% - 4.50% | ~5.10% |
| 12 months | 4.50% - 5.00% | ~5.30% |
| 24 months | 4.30% - 4.70% | ~5.00% |
Macquarie Bank announced a 12-month term deposit rate of 5.00% p.a. from 19 March 2026.
The laddering strategy: Rather than locking all your savings into a single term deposit, consider “laddering” across multiple terms (for example, splitting funds across 3-month, 6-month, and 12-month terms). This provides regular maturity dates for liquidity while capturing higher rates on longer terms.
The May 2026 Outlook: What’s Coming Next
All four major banks are now forecasting another 25 basis point hike at the RBA’s May meeting, which would take the cash rate to 4.35%. This would effectively reverse all three rate cuts delivered in 2025.
The implications are significant:
- Monthly repayments on the average $736,000 mortgage would increase by another ~$120, bringing the total increase since February 2026 to roughly $345 per month ($4,140 per year).
- Borrowing capacity would shrink further, with a household on $150,000 losing an additional ~$20,000 in borrowing power.
- Savings rates would likely climb again, with some institutions potentially offering 6%+ on conditional savings accounts.
However, the May decision isn’t guaranteed. The quarterly CPI data (due late April) and the March employment figures will heavily influence the board’s decision. If inflation moderates or unemployment climbs above 4.5%, the case for a pause strengthens considerably.
Practical Steps to Take Right Now
For mortgage holders
- Check your rate. Compare what you’re paying against the best available rates. If the gap is more than 0.20%, take action.
- Call your bank. Negotiate a rate reduction. It takes 15 minutes and could save you thousands.
- Consider refinancing. If your bank won’t budge, a mortgage broker can compare offers from 30+ lenders in your situation.
- Review your loan structure. Is a split (fixed/variable) appropriate? Should you extend your loan term temporarily to reduce repayments?
- Build a buffer. If you have an offset account, prioritise building the balance. Every dollar in offset reduces the interest you pay.
For savers
- Don’t leave money in transaction accounts. Even the big four are now offering 4.65%+ on savings accounts with basic conditions.
- Compare beyond the big four. Online banks consistently offer higher rates. Check comparison sites for the best current deals.
- Consider term deposits for funds you won’t need. Rates above 5% are available for 6 to 12 month terms.
- Watch for introductory rate traps. Some high headline rates revert to much lower base rates after 3 to 5 months. Set a calendar reminder to review.
For investors
- Review your investment loan rate. Investor rates are typically 0.25% to 0.50% higher than owner-occupier rates. Make sure you’re not paying more than necessary.
- Assess your cashflow. With rising rates and potential rental stress, ensure your investment property cash flow projections are realistic.
- Consider your portfolio allocation. High-interest savings and term deposits now offer genuine competition to riskier investments. A 5%+ guaranteed return is attractive on a risk-adjusted basis.
The Bottom Line
The March 2026 rate hike hit borrowers uniformly across the big four, with all banks passing on the full 0.25%. But the details, particularly around savings rates, fixed rate offerings, and new customer discounts, vary enough to make shopping around worthwhile.
In an environment where every dollar counts, being an active, informed consumer of banking products isn’t optional. It’s essential. Whether that means calling your bank to negotiate, switching to a better savings account, or working with a mortgage broker to find the best deal, small actions can translate into significant savings.
Looking for personalised mortgage advice? Find a qualified mortgage broker near you on WealthWorks, or connect with a financial adviser to review your overall financial position.
Frequently Asked Questions
Which Australian big four bank has the lowest variable mortgage rate in March 2026?
As of late March 2026, CBA's standard variable rate sits at 8.10% p.a. for owner-occupiers, though discounted rates for new customers can be significantly lower (around 6.39% to 6.69% depending on LVR). NAB and Westpac offer comparable discounted rates. The best rate varies depending on your LVR, loan size, and whether you're a new or existing customer. A mortgage broker can compare actual offers across all lenders.
Did all four major Australian banks pass on the full March 2026 RBA rate hike?
Yes, all four major banks (CBA, NAB, Westpac, and ANZ) announced they would pass on the full 0.25% increase to variable home loan rates. NAB was the first to announce, with changes effective 27 March 2026. However, the timing, effective dates, and treatment of savings rates varied between banks.
What are the best savings account rates from Australian big four banks in March 2026?
Following the March 2026 hike, the best conditional savings rates from the big four are: Westpac Spend&Save (18-34 year olds) at 5.50% p.a., Westpac Life at 4.75% p.a., and CBA's GoalSaver and NetBank Saver offering competitive rates with bonus conditions. Online-only banks and smaller institutions generally offer higher rates, with some exceeding 5.50% p.a.
How much extra will Australian mortgage holders pay after the March 2026 rate hike?
On a $600,000 variable rate mortgage, the 0.25% increase adds approximately $95 to $120 per month (around $1,140 to $1,440 per year). Combined with the February 2026 hike, borrowers are now paying roughly $225 more per month ($2,700 per year) than they were at the start of 2026. On the average Australian mortgage of $736,000, the March hike alone adds around $120 per month.
Should I switch banks after the March 2026 rate hike in Australia?
Possibly. The big four banks often offer significantly better rates to new customers than existing ones (the 'loyalty tax'). If your current variable rate is more than 0.30% above the best available rate, switching could save thousands over the life of your loan. However, factor in discharge fees, establishment fees, and any break costs on fixed rates. A mortgage broker can calculate whether switching makes financial sense for your specific situation.
Are Australian fixed mortgage rates expected to rise further in 2026?
Yes. With all four major banks forecasting another RBA hike in May 2026 (taking the cash rate to 4.35%), fixed rates are likely to continue climbing. Some lenders have already increased fixed rates ahead of the RBA's next decision. If you're considering fixing, the current window may offer better rates than what's available in a few months, though this depends on how long you fix for and your outlook on the rate cycle.
