Banks hike home loan interest rates as APRA and RBA rulings loom

On the heels of the Big Four, UBank, Bank of Queensland and People’s Choice Credit Union raised fixed mortgage rates.

CommBank, Westpac, NAB and ANZ have it all increased fixed mortgage rates, largely consistent with each other, while reducing variable rates.

This comes ahead of the RBA’s decision on the Melbourne Cup cash rate on Tuesday and new APRA service rules to come on Monday.

While the RBA is expected to hold firm, major banks have adjusted their forecasts for when the first cash rate hike will take place – the CBA had the first advice in November 2022, followed by Westpac in February 2023 and ANZ in the second half of 2023.

This is despite the Reserve Bank board saying it does not expect a rate hike until 2024, even as inflation hits the 3% mark for two consecutive quarters.

A number of other lenders raised home loan rates on Thursday, including UBank, Bank of Queensland and People’s Choice Credit Union.

UBank

UBank has raised fixed rates on three- and five-year home loans. Some changes include:

  • Owner occupant P&I fixed 3 years 80%: Increase of 24 basis points to 2.09% per year (comparative rate of 2.19% per year*)
  • Owner occupant P&I fixed 5 years 80%: Increase of 10 basis points to 2.59% per annum (comparative rate of 2.37% per annum*)
  • Investor Fixed 3 years P&I 3 years: Increase of 15 basis points to 2.24% per annum (comparative rate of 2.34% per annum*)
  • Investor Fixed 5 years P&I 5 years: Increase of 10 basis points to 2.64% per annum (comparative rate of 2.48% per annum*)

Investment real estate loans have a ceiling 80% RLV.

UBank has also raised interest rates on homeowner’s home loans for those with deposits by 15% (85%) LVR, which waive mortgage insurance from lenders.

Bank of Queensland

The BoQ also increased fixed mortgage rates for homeowners by 10 basis points, over a period of one to five years. Some changes include:

  • Fixed 1 year 80%: Now 2.39% per year (comparative rate of 3.19% per year*)
  • Fixed 2 Years 80%: Now 2.09% per year (comparative rate of 3.08% per year*)
  • Fixed 3 Years 80%: Now 2.29% per year (comparative rate of 3.05% per year*)

Fixed-rate home loans for borrowers with up to 90% LVR were also increased by 10 basis points.

people’s choice

The Adelaide-based Credit Union did much the same, raising interest rates on fixed mortgages. Some changes included:

  • Fixed residential 4 years P&I: Increase of 25 basis points to 2.79% per year (comparative rate of 4.08% per year*)
  • Fixed investment 4 years P&I: Increase of 25 basis points to 2.99% per year (comparative rate of 4.57% per year*)

A number of other investor and homeowner loans with terms between four and five years were also raised by five and 25 basis points.

People’s Choice also cut its standard variable rates for homeowners and investors by 35 basis points.

Australian Military Bank – a bank reserved for members and families of the Defense Forces – also cut its standard variable rate by 159 basis points.


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Lender

Rate type Gap Redraw Ongoing charges The initial costs LVR Lump sum reimbursement Additional refunds Pre-approval

Variable More details
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Variable More details
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Variable More details
ZERO APPLICATION FEESCOMPENSATION WITHOUT COST

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Variable More details
AN EASY DIGITAL APPLICATION
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Careful variable real estate loan (capital and interest) (LVR
  • No ongoing fees – None!
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  • Redraw – Access your extra payments if you need them
  • Use the app for loan information to help you pay off your home loan faster

Variable More details
BENEFIT FROM A REDUCED GREEN RATE*

Green real estate loan (capital and interest)

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Basic criteria: a loan amount of $400,000, variable, fixed, principal and interest (P&I) real estate loans with an LVR (loan-to-value) ratio of at least 80%. However, the “Compare mortgages” table allows calculations to be made on the variables selected and entered by the user. All products will list the LVR with the product and price list which is clearly published on the product supplier’s website. Monthly repayments, once the basic criteria are modified by the user, will be based on the advertised prices of the selected products and determined by the loan amount, repayment type, loan term and LVR as entered by the user. user/you. *The comparison rate is based on a loan of $150,000 over 25 years. Please note: this comparison rate is only true for this example and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different comparison rate. Rates correct as of April 3, 2022. See disclaimer.


Photo by Eunice C on Unsplash

The whole market has not been taken into account in the selection of the above products. Instead, a reduced portion of the market was considered. Products from some vendors may not be available in all states. To be considered, the product and price must be clearly published on the product supplier’s website. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au and Performance Drive are part of the Savings Media group. In the interest of full disclosure, Savings Media Group is associated with Firstmac Group. To learn how Savings Media Group handles potential conflicts of interest, as well as how we are paid, please visit the website links at the bottom of this page.

Bernadine J. Perkins