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CBA & NAB raise variable rates – what does it mean for your home loan?

Citing the need to strengthen its capital position ahead of APRA-required changes next July the Commonwealth Bank was the second of the Big 4 to move on interest rates, increasing  in its variable home loan rates by 15 basis points.

  • Standard Variable Rate will increase by 15 basis points, to 5.60% for owner occupied home loans.
  • Investment Home Loan Standard Variable Rate will increase by 15 basis points to 5.87%.

“Any decision to change interest rates is carefully considered,” said Matt Comyn, Group Executive for Retail Banking Services.

“The cost of the new capital required to make the Australian banking system more secure needs to balance the interests of our customers, as well as the nearly 800,000 households who are direct shareholders and the millions more who are invested through their superannuation funds.

What does the Commonwealth Bank interest rate rise mean for borrowers?

Table: Impact of Commowealth Bank’s Standard Variable Rate Increase on Monthly Repayments
Loan Amount Current Rate New Rate Difference
5.45% 5.60% 0.15%
$          300,000 $1,833.32 $1,860.22 $26.91
 $          400,000 $2,444.42 $2,480.29 $35.87
 $          500,000 $3,055.53 $3,100.37 $44.84
 $          600,000 $3,666.63 $3,720.44 $53.81
 $          700,000 $4,277.74 $4,340.52 $62.78
 $          800,000 $4,888.84 $4,960.59 $71.75
 $          900,000 $5,499.95 $5,580.66 $80.72
 $       1,000,000 $6,111.05 $6,200.74 $89.69
Source: www.canstar.com.au
Based on a loan term of 25 years. Fees were not considered.

NAB raises variable interest rates

An announcement from National Australia Bank that it will increase the interest rate on all new and existing variable rate home loans by 0.17% p.a. to 5.60% p.a., effective Thursday 12 November 2015, followed soon after. This is what NAB’s interest rate increase will mean:

 

Table: Impact of nab’s Standard Variable Rate Increase on monthly repayments
Loan Amount Current Rate New Rate Difference
5.43% 5.60% 0.17%
$          300,000 $1,829.74 $1,860.22 $30.48
 $          400,000 $2,439.66 $2,480.29 $40.64
 $          500,000 $3,049.57 $3,100.37 $50.80
 $          600,000 $3,659.49 $3,720.44 $60.96
 $          700,000 $4,269.40 $4,340.52 $71.12
 $          800,000 $4,879.31 $4,960.59 $81.28
 $          900,000 $5,489.23 $5,580.66 $91.44
 $       1,000,000 $6,099.14 $6,200.74 $101.60
Source: www.canstar.com.au
Based on a loan term of 25 years. Fees were not considered.

 

ANZ has also announced a rate increase, moving 18 basis points to a standard variable rate of 5.56%.

Compare home loan interest rates

Borrowers should keep in mind that the APRA capital requirements affect only the Big 4 and Macquarie Bank. On Canstar’s database there are 100 home loan lenders to compare!

Currently, the highest, lowest and average home loan interest rates on our database are as follows:

Snapshot of the current market (Friday 23rd October)
Stat Basic Variable Standard Variable Package Variable 1 Year Fixed 2 Year Fixed 3 Year Fixed 4 Year Fixed 5 Year Fixed
Average 4.63% 4.82% 4.56% 4.45% 4.46% 4.52% 4.79% 4.83%
Min 3.89% 3.88% 3.99% 3.50% 3.69% 3.89% 4.24% 4.24%
Max 5.64% 6.12% 5.12% 5.84% 5.74% 5.74% 6.04% 6.04%
Decreases 5 9 1 3 3 2 2 4
Increases 2 3 1 2 0 0 0 0
Avg. Movement -0.02% -0.04% 0.08% -0.24% -0.60% -0.54% -0.30% -0.15%
Source: www.canstar.com.au, the search results do not include all home loan providers, and may not include all features relevant to you.

 

Get an idea of what your monthly repayments will be for different interest rates via our Home Loan Repayment Calculator.

 

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