Oh No! Banks are raising rates again
Three big banks and several smaller lenders have raised home loan interest rates over the summer break. Meanwhile, one bank has cut some of its rates for owner occupiers and investors. Despite no moves to change the official interest rate by the Reserve Bank of Australia, some lenders are taking it upon themselves to change their rates, and monthly repayments, on their customers.
And more rate rises are expected, irrespective of what direction the Reserve Bank takes. Bank profit returns relative to equity has declined over the last five years, despite rising loan sales and increasing loan sizes. National Australia Bank’s Antony Cahill told Fairfax Media this week that funding costs for fixed and variable rate mortgages is rising. Financial product research firm Morningstar’s David Ellis said: “I think we will see out-of-cycle increases in owner-occupied home loan interest rates.”
But first, which banks are cutting their home loan rates?
National Australia Bank has cut its one-year home loan package fixed rate by 0.10 percentage points to 3.89 per cent for owner occupiers. NAB has also cut its one-year year package fixed rate for residential investment home loans by 0.15 percentage points to 3.99 per cent per annum.
Which big banks are raising their interest rates?
National Australia Bank has raised fixed rates on two year fixed packaged home loans by 0.23 percentage points to 3.98 per cent. NAB’s three year fixed packaged home loan rate has gone up 0.20 percentage points to 4.09 per cent. NAB’s four year fixed packaged home loan rate has moved up 0.60 percentage points to 4.59 per cent.
ANZ Bank has raised rates on two year fixed rate home loans by 0.23 percentage points to 3.9 per cent. ANZ has hiked three year fixed rates to 4.0 per cent. ANZ has hiked its variable rate for investors up by 0.08 percentage points to 5.60 per cent.
Commonwealth Bank’s standard variable investor home loan interest rate has been increased by 0.07 percentage points, to 5.56 per cent. Commonwealth Bank’s Viridian Line of Credit interest rate has increased by 0.15 percentage points, to 5.78 per cent per annum. CBA has left its owner-occupier standard variable rate at 5.22 per cent.
Other lenders that have announced rate rises for home buyers in the last few weeks include Suncorp, QBE, Virgin Money and Bank Australia. You can compare and research all the home loan products of all of Australia’s significant home lenders here.