The major lender has followed similar moves announced recently by both NAB and ANZ. According to a Fairfax
report, the changes will mean rates set in reference to a bill margin, which are commonly used by commercial customers, will increase by 0.23 of a percentage point.
Rates on various other types of business loans that are often used by smaller businesses, including overdrafts, will lift by 0.19 percentage points.
In addition, the lender is also increasing interest rates by 0.3 of percentage point on a range of business loans that it no longer offers to new customers.
Some of Westpac's home loan customers will also face a rate increase, according to Fairfax
, as the bank plans to increase interest rates on lines of credit held against residential property. Rates on lines of credit will increase by 0.17 of a percentage point for customers with a Westpac-branded loan, and 0.15 of a percentage point for customers of St George.
A Westpac spokesperson told Fairfax
the major bank was lifting rates on business loans because of the lift in wholesale funding costs and rules requiring banks to be better capitalised.
“Business lending activity in our commercial and business banking division has experienced increased costs, including higher funding costs, which has impacted returns.
“While we have been disciplined in managing our margins, over the long term all businesses must deliver sustainable returns.”
NAB was the first lender to announce rate rises when it increased interest rates by 0.29 of a percentage point in early February.
ANZ then announced business rate rises of 0.21 of a percentage point, while it increased rates on lines of credit by 0.27 of a percentage point.
Westpac has become the third major lender to increase interest rates on business loans due to higher funding costs.