Pre-Christmas Increases to Variable Rate Home Loans

Over the past month a number of lenders have made moves on their variable rate home loans. Find out who….

Some households will be doing it a little bit tougher this Christmas following a round of interest rate hikes on some variable rate home loans. See which loans here.

The rate hikes come about as banks try to protect their profit margins amid higher funding costs.

Banks all over the world are experiencing these higher costs as inflationary pressures (particularly in the US) take effect.

Many Australian lenders initially hiked their fixed rate home loans in response, but variable rate loans also appear to be in the firing line.

Are interest rates going up?

Mortgage Choice CEO John Flavell said lenders will continue to lift interest rates throughout 2017 against this backdrop of increasing funding costs and possible increases in Australia’s cash rate.

“The US Central Bank indicated that the Federal Funds rate could rise by a further 75 basis points throughout 2017 – through three separate rate increases,” Flavell said.

“This announcement, combined with the fact that many of Australia’s lenders have started to raise rates across their suite of home loan products, would suggest a cash rate increase by the Reserve Bank of Australia is now more of a possibility than not in 2017.”

But AMP Capital’s Chief Economist Shane Oliver doesn’t believe the US Central Bank’s recent interest rate hike signals that the RBA will follow and increase rates next year.

“With the Australian economy remaining weaker relative to its potential than the US and inflation running further below target, we remain of the view that the RBA will be cutting rates again in 2017, not hiking them,” Oliver wrote in his insights blog.

Current home loan market

Mortgage holders still have the power of competition working in their favour, with standard variable rates as low as 3.35% p.a. available (read the Comparison Rate Warning):

Table: Residential Home Loan Market – Snapshot of the current market (12/12/2016 – 19/12/2016)
Basic Variable Standard Variable Package Variable
Average 4.28% p.a. 4.43% p.a. 4.23% p.a.
Min 3.36% p.a. 3.35% p.a. 3.69% p.a.
Max 5.45% p.a. 5.73% p.a. 5.23% p.a.
Source: www.canstar.com.au

The search results do not include all home loan providers, and may not include all features relevant to you. Loans based on loan amount of $300,000 and available for Principal and Interest repayments.

Investors also have opportunities to save with standard variable investment rates as low as 3.69% p.a. (read the Comparison Rate Warning):

Table: Investment Home Loan Market – Snapshot of the current market (12/12/2016 – 19/12/2016)
Basic Variable Standard Variable Package Variable
Average 4.53% 4.70% 4.52%
Min 3.69% 3.69% 3.88%
Max 5.55% 5.93% 5.50%
Source: www.canstar.com.au

The search results do not include all home loan providers, and may not include all features relevant to you. Loans based on loan amount of $300,000 and available for Principal and Interest repayments.

Variable rate rises over past month

In the tables below are the lenders that have increased interest rates on their variable rate home loans.

Owner Occupier

Provider Product Old Rate (19/11/2016) New Rate (19/12/2016) Change Comparison Rate*
Adelaide Bank Smartfit Variable 90% 3.99% p.a. 4.09% p.a. 0.10% 4.31% p.a.*
Adelaide Bank SmartSaver 90% 3.94% p.a. 4.04% p.a. 0.10% 4.08% p.a.*
Bank of Melbourne Advantage Package Variable IO 250-499k 4.51% p.a. 4.59% p.a. 0.08% 5.02% p.a.*
Bank of Melbourne Variable IO 5.26% p.a. 5.34% p.a. 0.08% 5.51% p.a.*
BankSA Advantage Package Variable IO 250-499k 4.53% p.a. 4.61% p.a. 0.08% 5.04% p.a.*
BankSA Variable IO 5.33% p.a. 5.41% p.a. 0.08% 5.58% p.a.*
Bendigo Bank Connect Package Variable Owner Occupied 250-499k 4.23% p.a. 4.33% p.a. 0.10% 4.57% p.a.*
Bendigo Bank Generation Green 250-499k 4.58% p.a. 4.68% p.a. 0.10% 4.69% p.a.*
Bendigo Bank Residential Variable 250-499k 4.58% p.a. 4.68% p.a. 0.10% 4.8% p.a.*
ING DIRECT Mortgage Simplifier 150-499k 3.89% p.a. 4.04% p.a. 0.15% 4.08% p.a.*
ING DIRECT Orange Advantage Orange Advantage Variable  80% 150-499k 3.74% p.a. 3.89% p.a. 0.15% 4.11% p.a.*
ING DIRECT Orange Advantage Variable 150-499k 80% 3.74% p.a. 3.89% p.a. 0.15% 4.11% p.a.*
loans.com.au Purchase Essentials 80 PI 3.39% p.a. 3.59% p.a. 0.20% 3.63% p.a.*
MyState Special Residential Home Loan 80% 3.89% p.a. 3.99% p.a. 0.10% 4.04% p.a.*
SERVICE ONE Alliance Bank Standard Variable 250-499k 4.35% p.a. 4.45% p.a. 0.10% 4.6% p.a.*
St.George Bank Advantage Package Variable IO 250-499k 4.54% p.a. 4.62% p.a. 0.08% 5.05% p.a.*
St.George Bank Variable IO 5.34% p.a. 5.42% p.a. 0.08% 5.59% p.a.*
Suncorp Bank Home Package Plus Owner Occupied Variable  90% 150k+ 3.95% p.a. 4.05% p.a. 0.10% 4.42% p.a.*
Suncorp Bank OO Back To Basics 3.71% p.a. 4.02% p.a. 0.31% 4.03% p.a.*
The Rock Essentials Special 80% 3.89% p.a. 3.99% p.a. 0.10% 4.04% p.a.*
UBank UHomeLoan – Real Reward Offer IO 4.03% p.a. 4.13% p.a. 0.10% 4.13% p.a.*
UBank UHomeLoan – Standard Variable IO 4.36% p.a. 4.46% p.a. 0.10% 4.39% p.a.*
UBank UHomeLoan – Standard Variable PI 4.07% p.a. 4.17% p.a. 0.10% 4.10% p.a.*
UBank Value Offer – 20% Deposit Minimum 3.64% p.a. 3.74% p.a. 0.10% 3.74% p.a.*
Westpac Flexi First Option IO 4.68% p.a. 4.76% p.a. 0.08% 4.82% p.a.*
Westpac Premier Advantage Rocket Repay Home Loan IO 250-499k 4.53% p.a. 4.61% p.a. 0.08% 5.04% p.a.*
Westpac Rocket Repay Home Loan IO 5.33% p.a. 5.41% p.a. 0.08% 5.56% p.a.*
Source: www.canstar.com.au

Based on a loan available for $350,000 and 80% LVR. *Comparison rate based on loan amount of $150,000 over 25 years. Read the Comparison Rate Warning.

Property Investor

Provider Product Old Rate (19/11/2016) New Rate (19/12/2016) Change Comparison Rate*
Adelaide Bank Investment Smartfit Variable 90% 4.44% p.a. 4.54% p.a. 0.10% 4.75% p.a.*
Adelaide Bank Investment SmartSaver 90% 4.39% p.a. 4.49% p.a. 0.10% 4.53% p.a.*
ANZ Breakfree Investment Variable 250-499k 4.72% p.a. 4.80% p.a. 0.08% 4.81% p.a.*
ANZ Investment Variable 5.52% p.a. 5.60% p.a. 0.08% 5.71% p.a.*
Bank of Melbourne Advantage Package Investment Variable IO 250-499k 4.76% p.a. 4.84% p.a. 0.08% 5.26% p.a.*
Bank of Melbourne Investment Variable IO 5.51% p.a. 5.59% p.a. 0.08% 5.76% p.a.*
BankSA Advantage Package Investment Variable IO 250-499k 4.78% p.a. 4.86% p.a. 0.08% 5.28% p.a.*
BankSA Investment Variable IO 5.58% p.a. 5.66% p.a. 0.08% 5.83% p.a.*
Bankwest Complete Home Loan Variable Investment  80% 200k+ 4.19% p.a. 4.34% p.a. 0.15% 4.73% p.a.*
Bankwest Premium Select Home Loan Investment 80% 4.29% p.a. 4.44% p.a. 0.15% 4.46% p.a.*
Bankwest Variable Investment 80% 5.67% p.a. 5.82% p.a. 0.15% 5.84% p.a.*
Bendigo Bank Connect Package Variable Investment 250-499k 4.51% p.a. 4.61% p.a. 0.10% 4.84% p.a.*
Bendigo Bank Residential Investment Variable 250-499k 4.86% p.a. 4.96% p.a. 0.10% 5.08% p.a.*
ING DIRECT Inv Mortgage Simplifier 150-499k 80% 4.14% p.a. 4.29% p.a. 0.15% 4.33% p.a.*
ING DIRECT Inv Orange Advantage Variable 150-499k 80% 3.99% p.a. 4.14% p.a. 0.15% 4.36% p.a.*
MyState Special Residential Investment Loan 80% 4.16% p.a. 4.26% p.a. 0.10% 4.31% p.a.*
NAB Choice Package Investment Tailored Variable – IO 250-749k 4.65% p.a. 4.80% p.a. 0.15% 5.22% p.a.*
NAB Choice Package Investment Tailored Variable – P&I 250-499k 4.55% p.a. 4.70% p.a. 0.15% 5.08% p.a.*
NAB Inv Base Variable Indicator Rate 5.19% p.a. 5.34% p.a. 0.15% 5.39% p.a.*
NAB Inv Base Variable Rate – IO 4.78% p.a. 4.93% p.a. 0.15% 4.98% p.a.*
NAB Inv Base Variable Rate – P&I 4.25% p.a. 4.40% p.a. 0.15% 4.45% p.a.*
NAB Investment Tailored Variable – IO 5.50% p.a. 5.65% p.a. 0.15% 5.79% p.a.*
NAB Investment Tailored Variable – P&I 5.40% p.a. 5.55% p.a. 0.15% 5.69% p.a.*
NAB Private Tailored Pkg Investment Tailored Variable – P&I 250-499k 4.55% p.a. 4.70% p.a. 0.15% 5.40% p.a.*
SERVICE ONE Alliance Bank Investment Standard Variable 250-499k 4.60% p.a. 4.70% p.a. 0.10% 4.85% p.a.*
St.George Bank Advantage Package Investment Variable IO 250-499k 4.79% p.a. 4.87% p.a. 0.08% 5.29% p.a.*
St.George Bank Investment Variable IO 5.59% p.a. 5.67% p.a. 0.08% 5.84% p.a.*
Suncorp Bank Home Package Plus Investment Variable 150k+ 4.09% p.a. 4.32% p.a. 0.23% 4.69% p.a.*
Suncorp Bank Investment Back To Basics 3.98% p.a. 4.29% p.a. 0.31% 4.30% p.a.*
Suncorp Bank Investment Variable 5.72% p.a. 5.87% p.a. 0.15% 6.03% p.a.*
UBank Inv UHomeLoan Variable 4.36% p.a. 4.46% p.a. 0.10% 4.39% p.a.*
UBank Investor IO-Investor Extra IO Offer 4.14% p.a. 4.24% p.a. 0.10% 4.24% p.a.*
UBank Investor PI-Investor Extra PI Offer 3.79% p.a. 3.89% p.a. 0.10% 3.89% p.a.*
Westpac Inv Flexi First Option IO 4.95% p.a. 5.03% p.a. 0.08% 5.09% p.a.*
Westpac Premier Advantage Rocket Investment Loan IO 250-499k 4.80% p.a. 4.88% p.a. 0.08% 5.30% p.a.*
Westpac Rocket Investment Loan IO 5.60% p.a. 5.68% p.a. 0.08% 5.83% p.a.*
Source: www.canstar.com.au

Based on a loan available for $350,000 and 80% LVR. *Comparison rate based on loan amount of $150,000 over 25 years. Read the Comparison Rate Warning.

Variable rate cuts over past month

It’s not all doom and gloom – there have actually been a number of lenders going against the hike trend by cutting their home loan variable interest rates. In the tables below are the lenders that have lowered interest rates on their variable rate home loans.

Owner Occupier

Provider Product Old Rate (19/11/2016) New Rate (19/12/2016) Change Comparison Rate*
Macquarie Bank Basic Variable Owner Occupied PI 80 150-749k 3.89% p.a. 3.79% p.a. -0.10% 3.80% p.a.*
Macquarie Bank Offset Home Loan Package Offset Variable Owner Occupied PI  80% 150-749k 3.89% p.a. 3.79% p.a. -0.10% 4.19% p.a.*
Macquarie Bank Offset Variable Owner Occupied PI 150-749k 80% 3.89% p.a. 3.79% p.a. -0.10% 4.20% p.a.*
Macquarie Credit Union Power 250.00001-k 4.29% p.a. 3.69% p.a. -0.60% 4.09% p.a.*
Newcastle Permanent Premium Plus Package Premium Variable 150-499k 3.85% p.a. 3.74% p.a. -0.11% 4.14% p.a.*
People’s Choice Credit Union Basic Variable 90% 4.43% p.a. 4.24% p.a. -0.19% 4.24% p.a.*
RESI Mortgage Corp Flexi Options 80 4.24% p.a. 3.99% p.a. -0.25% 4.05% p.a.*
Source: CANSTAR. Based on a loan available for $350,000 and 80% LVR.*Comparison rate based on loan amount of $150,000 over 25 years. Read the Comparison Rate Warning.

Property Investor

Provider Product Old Rate (19/11/2016) New Rate (19/12/2016) Change Comparison Rate*
Gateway Credit Union Investment Variable 80% 5.26% p.a. 5.10% p.a. -0.16% 5.16% p.a.*
Macquarie Credit Union Inv Power 250.00001-k 4.48% p.a. 3.88% p.a. -0.60% 4.28% p.a.*
Victoria Teachers Mutual Bank Education Package Home Loan Inv First Home Buyer  80% 4.19% p.a. 3.99% p.a. -0.20% 4.29% p.a.*
Victoria Teachers Mutual Bank Education Package Home Loan Inv Variable  80% 4.19% p.a. 3.99% p.a. -0.20% 4.31% p.a.*
Source: www.canstar.com.au

Based on a loan available for $350,000 and 80% LVR. *Comparison rate is based on $150,000 over 25 years. Read the Comparison Rate Warning.


CANSTAR is an information provider and in giving you product information CANSTAR is not making any suggestion or recommendation about a particular credit product. If you decided to apply for a home loan, you will deal directly with a financial institution, and not with CANSTAR. Rates and product information should be confirmed with the relevant financial institution. For more information, read our 
detailed disclosure, important notes and additional information. *Read the Comparison Rate Warning.

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