CUA slashes rates on 3-year fixed investment home loans

12 April 2018
CUA has cut interest rates on its range of three-year fixed investment home loans by up to 35 basis points.

CUA home loans

Image: CUA (Facebook)

The credit union announced on Wednesday it had reduced its principal and interest (P&I) three-year fixed rate for residential investors by 15 basis points from 4.14% to 3.99% p.a. (5.18% p.a.* comparison rate).

Its premium equivalent was also cut by 15 basis points from 4.26% to 4.11% p.a. (5.21% p.a.* comparison rate).

Interest-only (IO) three-year fixed rates for residential investors were reduced by 35 basis points on its standard and premium products to 4.14% p.a. (5.22% p.a.* comparison rate) and 4.26% p.a. (5.25%* p.a. comparison rate) respectively.

CUA’s cuts to these fixed investment loans follows the credit union’s decision last month to increase interest rates on some of its owner-occupier variable home loans by up to 43 basis points.

CUA’s new 3-year fixed investment rates – principal & interest

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

CUA’s new 3-year fixed investment rates – interest only

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

CUA’s “most competitive headline rate”

Chief Operating Officer Brigid Leishman said it was important for CUA to be able to support both its owner-occupier and investor members with a range of competitive home loan rates, across fixed and variable options.

“Our three-year fixed rate for investors making principal and interest repayments is now CUA’s most competitive headline rate across our fixed and variable investor loan options,” Ms Leishman said.

“We are seeing really strong lending growth in the owner-occupier market, with our Advance Variable Home Loan continuing to be popular with borrowers.

“But we recognised that while we were seeing strong owner-occupier growth, it was also time to take a look at our investor rates to make sure we are delivering the best possible value to members.”

A sign of declining property market demand?

Canstar’s Group Manager of Research and Ratings Mitch Watson said CUA’s decision to lower their rates for investment loans could be another sign that demand in the property market is continuing to decline.

“Median property values in Sydney have seen the first 12-month decline in over five years, with reported falls in both Sydney and Melbourne markets accelerating in the last three months. CUA slashing rates for interest-only investors suggests they are keen to get investors back in the market,” Mr Watson said.

This month has also seen rate cuts to fixed and variable investment loans from UBank, Greater Bank, ING, Aussie and Bankwest.

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