Advertisement

Rates Continue To Move Despite RBA Inaction

Home loan rates continued to fluctuate in June, despite no cash rate movements from the Reserve Bank for 11 months.

All of the ‘big 4’ banks (ANZ, Commonwealth Bank, National Australia Bank, and Westpac) announced rate cuts to standard variable owner-occupied principal and interest home loans, while also revealing rate hikes for interest only owner-occupied and investment home loans.

A total of 11 lenders on Canstar’s database cut rates on standard variable owner-occupied principal and interest loans over June, with an average cut of 7 basis points.

These rate cuts were small compared to the size of the rate hikes on interest only loans, with the big 4 passing on increases between 30 to 35 basis points.

Canstar Research Analyst Joshua Sale said the main reason for the rate movements in June is the Australian Prudential Regulation Authority’s (APRA) new restrictions on interest only lending.

“By raising interest-only rates, the major banks appear to be guiding new borrowers to principal and interest options,” Mr Sale said.

Investment interest only home loans in particular have experienced large rate hikes lately.

According to Canstar Group Executive (Financial Services) Steve Mickenbecker, in the 11 months since the Reserve Bank last moved, investment interest only loans have been hit with the equivalent of three 25 basis point rate hikes.

“Investors now in particular have to think ‘Can I do better? If I’m on interest only, is now the time to go to principal and interest?’,” Mr Mickenbecker said.

“But even if you don’t choose to move from interest only, the reality is that there are still good rates out there.”

Big 4 home loan rate changes

ANZ

Date of Announcement: 9 June 2017

Effective: 16 June 2017

For customers paying principal and interest

  • Owner occupier standard variable: 5 basis point cut from 5.25% p.a. to 5.20% p.a. (comparison rate of 5.30% p.a.*)
  • Investment standard variable: 5 basis point cut from 5.85% p.a. to 5.80% p.a. (comparison rate of 5.90% p.a.*)

For customers paying interest only

  • Owner occupier standard variable: 30 basis point raise from 5.45% p.a. to 5.75% p.a.(comparison rate of 5.09% p.a.*)
  • Investment standard variable: 30 basis point raise from 5.96% p.a. to 6.26% p.a. (comparison rate of 6.09% p.a.*)

*Read the comparison rate warning.

CBA (CommBank)

Date of Announcement: 27 June 2017

Effective: 7 July 2017

For customers paying principal and interest

  • Owner occupier standard variable: 3 basis point cut from 5.25% p.a. to 5.22% p.a.**
  • Investment standard variable: Held at 5.80% p.a. (comparison rate of 5.94%p.a.*)

For customers paying interest only

  • Owner occupier standard variable: 30 basis point raise from 5.47% p.a. to 5.77% p.a.**
  • Investment standard variable: 30 basis point raise from 5.94% p.a. to 6.24% p.a.**

*Read the comparison rate warning.

**These are the advertised rates, not the comparison rates. Comparison rates were not provided by the bank.

NAB

Date of Announcement: 23 June 2017

Effective: 30 June 2017

For customers paying principal and interest

  • Owner occupier standard variable: 8 basis point cut from 5.32% p.a. to 5.24% p.a. (comparison rate of 5.37% p.a.*)
  • Investment standard variable: Held at 5.80% p.a. (comparison rate of 5.93% p.a.*)

For customers paying interest only

  • Owner occupier standard variable: 35 basis point raise from 5.42% p.a. to 5.77% p.a. (comparison rate of 5.58% p.a.*)
  • Investment standard variable: 35 basis point raise from 5.90% p.a. to 6.25% p.a. (comparison rate of 6.11% p.a.*)

*Read the comparison rate warning.

Westpac

Date of Announcement: 20 June 2017

Effective: 30 June 2017

For customers paying principal and interest

  • Owner occupier standard variable: 8 basis point cut from 5.32% p.a. to 5.24% p.a. (comparison rate of 5.38% p.a.*)
  • Investment standard variable: Held at 5.79% p.a. (comparison rate of 5.93% p.a.*)

For customers paying interest only

  • Owner occupier standard variable: 34 basis point raise from 5.49% p.a. to 5.83% p.a. (comparison rate of 5.97% p.a.*)
  • Investment standard variable: 34 basis point raise from 5.96% p.a. to 6.30% p.a. (comparison rate of 6.43% p.a.*)

*Read the comparison rate warning.

Similar Topics:

Share this article