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Home loan rate wrap: AMP & Macquarie increase variable home loan rates

A string of lenders made changes to a total of 50 fixed and variable home loan rates last week, including lifts from AMP and Macquarie, Canstar data has found.

Macquarie AMP rate wrap

AMP increased its variable rates for both owner occupier and investor home loans last week with its owner-occupier principal and interest (P&I) loans rising by eight basis points and their investment loans, along with its owner-occupier interest-only loans, up by 17 basis points.

Macquarie Group made changes across its product range, including lifting the rate of its variable home loans by five to 10 basis points, while decreasing the rate of its fixed rate products by 10 basis points.

AMP and Macquarie, along with Aussie, join a number of other lenders, including Bank of Queensland, Auswide and ING, to increase rates in recent weeks as the banks try to offset rising funding costs.

Variable rate changes: owner-occupier home loans

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

Variable rate changes: investment home loans

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

IMB was the only bank in our database last week to cut rates on variable products with its Essentials investment interest-only home loan falling 20 basis points to 4.67%.

Rates based on investment home loans available for a loan amount of $350,000 at 80% LVR (interest-only)

Decreases to fixed home loan rates

In addition to raising rates on variable products, Aussie and Macquarie also lowered rates for owner-occupiers and investors.

Each of these decreases – tallying seven in total for Aussie and eight for Macquarie across principle & interest and interest-only products – were by 10 basis points.

Meanwhile, Teachers Mutual Bank increased their owner-occupier one-year, two-year and three-year fixed rate products by eight to nine basis points.

Canstar Group Manager of Research and Ratings Mitch Watson said demand from consumers for fixed rates appear to be waning as highlighted in the latest Australian Bureau of Statistics’ housing finance data which showed only 12.1% of owner-occupied loans were fixed in May.

“This is lowest level since September 2016 – the month after the last cash rate cut,” Mr Watson said.

“Demand has been on a steady decline since it peaked in August 2017 at 19% of loans being fixed. With limited movements on headline rates, borrowers may be feeling safe in their finances not to fix.”

Fixed rate changes: owner-occupier home loans

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

Big banks to cut discount rates?

Commonwealth Bank has cut up to 30 basis points on its Extra Home and Investment Home Loan two-year introductory product this week.

Westpac, meanwhile, is offering cuts of up to 50 basis points across all brands for new fixed home loan applications as of 5 June 2018, as well as up to 500,000 Frequent Flyer points on various home loans.

But according to Canstar’s Mitch Watson, a good home loan rate should still come first before extra incentives for prospective buyers.

“When it comes to additional incentives such as frequent flyer points, a borrower’s first focus should be on whether they are receiving a good value deal on their home loan based on costs and features,” Mr Watson said.

“A short-term incentive could end up costing a lot more if the focus is not on the home loan.”

Suncorp is running a special offer that cuts 55 basis points from its Home Package Plus one-year fixed rate and its Home Package Plus five-year fixed rate.

Its other discounts range from 25 to 35 basis points and apply to its two and three-year Home Package Plus products.

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