Advertisement

Home loan rate wrap: AMP, IMB, Greater Bank & more change rates

AMP Bank made some major changes to its owner occupier home loans last week, while rate hikes were seen on a number of investment home loans as tightening of bank lending to investors continued. One industry analyst said this tightening could lead to weak house price growth.

AMP share price

AMP cuts fixed rate home loans for owner occupiers

The financial services company dropped rates on its Affinity Package Residential Fixed P&I 3 yrs 100k+ and Select Package Residential Fixed P&I 3 yrs 100k+ home loans for owner occupiers by 70 basis points.

This week, those loans had an advertised interest rate of 3.79% (*comparison rate 4.35% and 4.62% respectively).

IMB was the only other bank on Canstar’s database that reduced fixed rates on owner occupier home loans, having cut rates by 10 basis points across five of its residential fixed loans.

IMB was also among the banks on Canstar’s database that increased rates on owner occupier home loans, joining Greater Bank and AMP.

New owner occupier home loan rates

Principal & interest

The table below shows owner occupier home loans with principal and interest (P&I) repayments that experienced an adjusted rate between 19/06/18 and 25/06/18.

Rates based on owner-occupier home loans available for a loan amount of $350,000 at 80% LVR (principal & interest). Table sorted by provider name (alphabetically).

Interest only

The table below shows owner occupier home loans with interest only (IO) repayments that experienced an adjusted rate between 19/06/18 and 25/06/18.

Rates based on variable owner-occupier home loans available for a loan amount of $350,000 at 80% LVR (interest only). Table sorted by provider name (alphabetically).

Investment home loan rate hikes as industry tightening continues

There was no relief for investment home loan customers last week, as lenders increased interest rates by up to 40 basis points.

AMP increased the rates on three of its variable rate investment home loans by 40 basis points, while Homestar Finance made smaller increases of 10 basis points to similar home loan products.

Industry analyst and economic forecaster BIS Oxford Economics argued in a report released earlier this week continued tightening of bank lending to investors via reduced interest-only loans would contribute to weak house price growth over the next few years, or even decline in some markets.

In the report, Residential Property Prospects 2018 to 2021, BIS Oxford Economics outlined a number of factors that were increasingly weighing on the residential property market, including pressures from rising new property levels and the continued tightening of lending to investors in light of the Banking Royal Commission.

In a statement, BIS Oxford Economics Senior Manager Angie Zigomanis said increased restrictions on investor and interest-only borrowing had reduced the capacity for investors to bid up prices.

The industry analyst warned as a broader consequence of tightened bank lending policies, many Australians who were now interest-only borrowers could face higher mortgage repayments as the interest-only period expired and loans reverted to P&I loan repayments.

“Most of these borrowers are expected to be able to roll over their loan and meet the higher repayments,” BIS Oxford Economics said in a statement.

“However, if there is a significant increase in those that cannot, many properties are likely to be placed back onto the market.

“While not necessarily a forced sale, the vendors will need to be flexible with price and this is likely to have an additional dampening effect on prices.”

New investment home loan rates

Principal & interest

The table below shows investment home loans with principal and interest (P&I) repayments that experienced an adjusted rate between 19/06/18 and 25/06/18.

Rates based on variable investment home loans available for a loan amount of $350,000 at 80% LVR (principal & interest). Table sorted by provider name (alphabetically).

Interest only

The table below shows investment home loans with IO repayments that experienced an adjusted rate between 19/06/18 and 25/06/18.

Rates based on variable investment home loans available for a loan amount of $350,000 at 80% LVR (interest only). Table sorted by provider name (alphabetically).

All home loan rate movements last week

Home Loan Product Level Changes between 19/06/2018 to 25/06/2018 (%)
Company Product  Old Rate New Rate Change Comparison Rate*
Owner Occupier Home Loans
Variable
AMP Bank Affinity Package Variable IO 250-749k 4.48 4.88 0.40 4.39
AMP Bank Professional Package Variable IO 250-749k 4.48 4.88 0.40 4.69
AMP Bank Select Package Variable IO 250-749k 4.48 4.88 0.40 4.70
IMB Accelerator – Owner Occupied 2 yrs 3.74 3.82 0.08 4.65
IMB Introductory Variable 1 yr 4.19 4.27 0.08 5.01
IMB Standard Variable IO 5.49 5.57 0.08 5.45
IMB Standard Variable P&I 90% 5.19 5.27 0.08 5.32
Fixed
AMP Bank Affinity Package Residential Fixed P&I 3 yrs 100k+ 4.49 3.79 -0.70 4.35
AMP Bank Professional Package Residential Fixed P&I 3 yrs 100k+ 4.29 3.79 -0.50 4.61
AMP Bank Select Package Residential Fixed P&I 3 yrs 100k+ 4.49 3.79 -0.70 4.62
Greater Bank Standard Fixed 3 yrs 3.99 4.09 0.10 4.55
Greater Bank Ultimate Fixed 3 yrs 150k+ 3.94 4.04 0.10 4.52
Greater Bank Great Rate Fixed 3 yrs 3.99 4.09 0.10 4.29
Greater Bank Ultimate Discount Fixed 3 yrs 150k+ 3.74 3.84 0.10 4.47
Greater Bank Great Rate Discount Fixed 3 yrs 3.79 3.89 0.10 4.24
IMB Residential Fixed P&I 1 yr 90% 4.29 4.19 -0.10 5.00
IMB Residential Fixed P&I 2 yrs 90% 3.75 3.65 -0.10 4.83
IMB Residential Fixed P&I 3 yrs 90% 3.89 3.79 -0.10 4.75
IMB Residential Fixed P&I 4 yrs 90% 4.39 4.29 -0.10 4.84
IMB Residential Fixed P&I 5 yrs 90% 4.29 4.19 -0.10 4.75
Investor Home Loans
Variable
AMP Bank Affinity Package Investment Variable IO 250-499k 4.58 4.98 0.40 4.52
AMP Bank Professional Package Investment Variable IO 250-499k 4.58 4.98 0.40 4.82
AMP Bank Select Package Investment Variable IO 250-499k 4.58 4.98 0.40 4.83
Homestar Finance Investment IO Variable 150-749k 80% 3.94 4.04 0.10 4.09
Homestar Finance Investment P&I Variable 150-749k 80% 3.79 3.89 0.10 3.94
Source: www.canstar.com.au. Rates based on loans available for $400,000 at 80% LVR. *Comparison rate based on a loan amount of $150,000 over 25 years.

Share this article