Banks have wasted no time cutting term deposit rates, repeatedly and deeply, however have been more reticent to make the same cuts to home loan rates - with some even continuing the hiking spree.
Investors with low deposits seem to be getting hit hardest, with the gap in interest rates generally widening when compared with their 80%-or-lower LVR brethren.
RBA data indicates the margin between under-80% LVR and over-80% for new investor loans funded in July was 35 basis points, up from 30 basis points in June. For reference, in July 2019 the margin was just 8 basis points; it got as low as 3 basis points mid-pandemic.
And that's seen in some of the movements featured in this article.
The following movements pertain specifically to new customers - existing customers may be affected differently.
AMP moves rates by up to 50bps
AMP increased a wide range of its variable-rate home loans by up to 50 basis points.
- For example the Basic Investor Variable loan paying P&I with 80% LVR is now 7.29% p.a. (7.34% p.a. comparison rate*).
- Notably if you have 10% less of a deposit, the rate jumps to 7.77% p.a. (7.82% p.a. comparison rate*).
Variable owner occupier rates were increased by the same margins but the overall rate is less.
A wide range of fixed-rate Professional Package loans however were cut by up to 40 basis points.
Westpac moves rates by up to 25bps
Some rates were bumped by up to 10 basis points while others were slashed by up to 25bps. Here's a quick summary of the highlights:
- Flexi First Option OO 2 Year Intro <80%: Up by 10 basis points to 6.19% p.a. (6.52% p.a. comparison rate*)
- Inv Fixed 2 Years P&I 80%: 20 basis point cut to 6.59% p.a. (8.71% p.a. comparison rate*)
Similar changes were also seen across Westpac subsidiaries Bank of Melbourne, BankSA, and St George.
NAB decreases rates by up to 96bps
NAB decreased variable rate by nearly a full percentage point. Here's a couple highlights:
- Investor Base Variable Rate P&I: Cut by 96bps to 7.01% p.a. (7.05% p.a. comparison rate*)
- OO Tailored Fixed 2 Years P&I 80%: Cut by 35bps to 6.24% p.a. (7.34% p.a. comparison rate*)
Bendigo Bank decreases rates by up to 20bps
Cuts applied to Bendigo's 'Complete' line of home loan products. Some highlights:
- OO Variable P&I <80%: Cut by 15bps to 6.09% p.a. (6.31% p.a. comparison rate*)
- Inv Variable P&I 80%: Cut by 20bps to 6.29% p.a. (6.51% p.a. comparison rate*)
Notably there is a 125 basis point premium for investors who have 90% LVR i.e. a 10% deposit, and a 115 basis point premium for owner occupiers.
Other lender movements
- The Capricornian increases fixed rates by 45bps
- Tic:Toc increases fixed rates by up to 13bps
- MyState Bank changes variable rates by up to 40bps