Australia’s big four banks have all lifted interest rates following the RBA’s decision to increase the national cash rate to 4.35 per cent.

Reserve Bank lifts interest rates by 0.25pc, to 4.35pc

The RBA has lifted rates by 0.25 basis points, to 4.35 per cent, which fully unwind last year’s rate cuts.

After Macquarie Bank became the first Australian bank to hike interest rates, the big four — Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), Westpac and ANZ — all followed suit, passing the increase on to their customers.

The RBA board’s announcement today took the country’s interest rate to 4.35 per cent, an increase of 0.25 per cent.

It marks the third consecutive rate rise this year.

Interest rates have now returned to the level they were in February 2025 before the RBA began its rate-cutting cycle last year.

After Macquarie Bank announced it would increase its variable home loan rates by 0.25 per cent per annum from May 22, CBA was next with an identical increase.

A Commonwealth Bank branch in Melbourne's CBD

CBA, Australia’s largest bank, has passed on the RBA’s 0.25 per cent increase to its mortgage holders. (ABC News: Margaret Burin)

CBA, Australia’s largest bank, said in a statement its rate changes announced today would be effective from May 15.

“Our focus is on supporting customers to stay on top of their finances, with practical tools, clear guidance and access to help when it’s needed,” said Angus Sullivan, CBA’s group executive of retail banking.

RBA risks recession

Monetary policy trade-offs are getting worse — the Reserve Bank of Australia is confronting rising inflation and downgraded growth forecasts. And there’s nothing much it can do.

Soon after, NAB, ANZ and Westpac announced they were also passing on the 0.25 per cent rise to their customers.  

Westpac chief executive, consumer, Carolyn McCann blamed the rise on the ongoing Iran war.

“The conflict in the Middle East continues to create global uncertainty and impact inflation,” she said.

Pedro Rodeia,  ANZ Group executive Australia retail, said Australians were “feeling pressure”.

“We recognise that many Australian households are feeling pressure from the cost of living amid current global uncertainty,” Mr Rodeia said.

Ana Marinkovic, NAB group executive personal banking, urged customers to get in touch now if they were struggling.

“If you’re feeling uncertain, the most important step is to reach out sooner rather than later so we can talk through what options might be right for your circumstances,” she said.

An office worker is seen at the Macquarie Bank offices in central Sydney

Macquarie Bank has become the first Australian bank to increase interest rates after the latest RBA decision. (AAP: Joel Carrett)

Earlier, Macquarie’s head of personal banking Ben Perham said interest rates paid on its transaction and savings accounts would also increase by 0.25 per cent.

“To give our customers more time to adjust to the higher interest rate environment, we are once again delaying this increase by more than two weeks,” he said.

“If your financial circumstances have changed, or you’re concerned about meeting your home loan repayments, we encourage you to get in touch with our team to understand what support may be available.”