Lending institutions are facing increased pressure from the Australian Prudential Regulation Authority (APRA) to adhere to new limits on interest only lending amid heightened risks of household debt and rising house prices.
Bendigo Bank Managing Director Mike Hirst said the recent movements from banks reflect the requirement to meet the APRA expectations while responding to the competitive owner-occupied mortgage pricing market for new lending.
“When setting interest rates our Bank needs to consider many factors and carefully take into account the needs of our stakeholders including customers, shareholders, staff, partners and the broader community,” said Mr Hirst.
“We’ve tried to carefully balance the interests of our mortgage customers, those who earn money through deposits and those who invest in our Bank, all while ensuring our pricing remains market competitive and provides the strategic springboard for accelerated growth.”
Bendigo encourages customers paying interest only repayments to convert to principal and interest repayments.
“Where the customer meets the lending criteria, the application and settlement fees will be waived,” said Mr Hirst.
ING says they will waive any switching fees until 31 August if existing customers wish to swap their interest only loans to principal and interest repayments.
Changes to Bendigo Bank home loan rates
Bendigo’s price changes will be effective from Friday, 14 July.
Check out the changes below:
- Variable interest rates will increase by 0.30% for existing owner-occupied interest only customers, and 0.40% for existing investment interest only customers.
Source: Bendigo Bank
Changes to ING Direct home loan rates
ING’s changes to its variable rate home loan portfolio will be effective from Friday, 7 July.
The changes are as follows:
- For owner-occupier borrowers on the Orange Advantage home loan, the P&I rates will decrease by 0.05%.
- Interest only owner-occupiers with either an Orange Advantage or Mortgage Simplifier home loan will see rates increase by 0.20%.
- For investor borrowers with either an Orange Advantage or Mortgage Simplifier home loan, interest only rates will increase by 0.35%.
Source: ING Direct
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