RBA Hold Interest Rates while Banks Hike Them

mortgage-rates-up1-300x225UPDATE: ING DIRECT will increase variable interest rates on all residential loan products by 0.18% p.a. effective from 15 January 2016. 

At yesterdays’s board meeting the Reserve Bank decided to leave the cash rate unchanged at the current low of 2.00%.
However, over the last few weeks the major banks and other lenders have been busy increasing their interest rates for owner occupier and investment home loans.

While the big banks copped all the negative publicity it seems a universal interest rate increase across all lenders.

In the table below I have summarised how much each lender had increased their interest rates and when they will pass this on to their consumers. While some lenders have not made announcements yet, I believe they will shortly or I cannot find a media statement saying they have increased their rates.

 

Current Bank Interest Rates Rate Cut and Date
Adelaide Bank +.07 – 0.17% 20 Nov 2015
Bendigo Bank +0.12% 20 Nov 2015
AMP +0.18% 20 Nov 2015
ANZ +0.18% 20 Nov 2015
Bank of Melbourne +0.15% 20 Nov 2015
Bank of Queensland +0.29% 10 Aug 2015
BankWest +0.18% 17 Nov 2015
Citibank No Announcement Yet
Commonwealth Bank +0.15% 20 Nov 2015
ING Direct Bank +018% 15 Jan 2016
Member equity bank ( ME) No Announcement Yet
RAMS Home Loans +0.15% 20 Nov 2015
NAB +0.17% 12 Nov 2015
St George Bank +0.15% 20 Nov 2015
Suncorp Bank +0.16% 20 Nov 2015
Westpac +0.20% 20 Nov 2015

Where to From Here?
While these changes affect banks and non-banks in different ways there are discounts that still can be found.

You can compare property investment loans at our mortgage comparison pages.

If you are looking for a home loan deals for owner occupied properties go to our compare home loans page.

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ANZ Rate Increase 0.18%: Follows Westpac NAB and CBA

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Along with NAB, ANZ Bank have announced that they will be increasing their variable interest rates by 0.18% effective 20th November 2015.

Following Westpacs, NAB and Commonwealth Banks move to increase variable interest rates they too cited that they are  partially offsetting costs associated with recent changes to capital requirements.

All four banks have decided to slug its customers to raise capital to secure their lending obligations by APRA. However, the countries treasurer, Scott Morrison, said there are many other ways for banks to raise the capital without hitting its customers.

The change is just under a month away so those considering new finance within this time should take into account the interest rate change.

There are many deals out there and you can compare home loans and compare investment loans at our home loan comparison pages.

If you need help with your home, investment or commercial finances we have professional mortgage advisors Australia wide that offer free mortgage help by simply contacting us.

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NAB Increase Interest Rates by 0.17%

nab

 

NAB have announced that they will be increasing their variable interest rates by 0.17% effective 12th November 2015.

Following Westpacs and Commonwealth Banks move to increase variable interest rates they too cited that they are  partially offsetting costs associated with recent changes to capital requirements.

We also expect ANZ to follow in the coming days. We also expect that lenders that are linked to these major banks such as Westpac subsidiaries: St George, Bank of Melbourne, Bank SA and RAMS; CBA subsidiary Bank West and NABS broking products all to increase interest rates as well.

The change is just under a month away so those considering new finance within this time should take into account the interest rate change.

There are many deals out there and you can compare home loans and compare investment loans at our home loan comparison pages.

If you need help with your home, investment or commercial finances we have professional mortgage advisors Australia wide that offer free mortgage help by simply contacting us.

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CBA – Commonwealth Bank Increase Interest Rates by 0.15%

 

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Following Westpacs 0.20% move to increase variable interest rates the Commonwealth Bank has today announced an increase in its variable home loan rates by 0.15%pa (15 basis points), citing that they are  partially offsetting costs associated with recent changes to capital requirements. Their Fixed rates and business lending rates remain unchanged.

For home loan customers, the standard variable rate for owner occupied loans will increase to 5.60% per annum and the standard variable rate will rise for investment home loans to 5.87% per annum. These changes will become effective on Friday, 20 November 2015.

The change is just under a month away so those considering new finance within this time should take into account the interest rate change.

There are many deals out there and you can compare home loans and compare investment loans at our home loan comparison pages.

If you need help with your home, investment or commercial finances we have professional mortgage advisors Australia wide that offer free mortgage help by simply contacting us.

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Westpac Raise Home Loan Interest Rates by 0.20%

westpac

 

In an unexpected move Westpac decided to raise interest rates in its variable home loan (owner occupied) and residential investment property loan rates by 20 basis points. The new rates take effect from 20 November 2015.

It is tipped that the big banks and smaller lenders will also look to the same but we will have to wait and see.

It is advised to wait a month or so to see how other lenders respond to Westpac’s move to increase interest rates.

However, you can compare home loans and compare investment loans at our home loan comparison pages.

If you need help with your home, investment or commercial finances we have professional mortgage advisors Australia wide that offer free mortgage help by simply contacting us.

 

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Property Investment Loans – New Regulations Shake Up Lending

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In the last months we have seen lenders tightening up their lending to property investors for both existing and new customers.

The Australian Prudential Regulation Authority (APRA ) recently moved to tighten lending criteria for property investment loans, many lenders are forced to reduce their lending risks.

 Why?
The reason for the stricter lending criteria is that APRA set a benchmark of 10% maximum growth for residential investment mortgages. The big banks were beginning to exceed this benchmark level and APRA had to take action.

By taking these measures, APRA is attempting to make the property market conditions safer for consumers. Rapid growth in property investment lending can be perceived as risky as investors may be placing ‘all their eggs in one basket’ rather than having investment diversification.

Lending criteria to reduce growth varies from lender to lender but we have seen changes across the board from banks to non banks. Some have already implemented the changes while others will be applying them soon in the coming months.

What do the changes mean for investors?
While banks and other non bank lenders have announced varying policies here is an overview of some of the measures that have been put in place for both new and current borrowers:

Stricter criteria to approve investor loans
This includes excluding certain properties for investment purposes. For example, not lending in certain postcodes or types of properties that are deemed high risk. Rural properties and high density apartments are prime examples.

Increased Interest Rates for Investment Loans
We have seen an increase in investment loan interest rates from the major banks and non-banks. This means that banks are no longer offering discounts for investment loans as they previously did and packaged.

Lenders are also penalising borrowers with “interest only” loans but will offer a discount for property investment loans that are paid with “principle and interest” repayments.

Deposits raised up to 20%
Lenders have also increased the required deposit. Previously, property investors could borrow up to 95% of the property’s value but some lenders require a 20% deposit where they can only borrow up to 80% of the property’s value.

Some lenders are not allowing investors with a current investment property to use the existing equity in that property to leverage for further investments where the LVR falls outside the 80% LVR benchmark – effectively forcing them to refinance.

Rental Income For Servicing Decrease
Lenders have reduced the amount of rental income taken into consideration when assessing an applicant’s income. Some have also taken out the negative gearing component in the assessment. This means that property investors will need to show other income outside their property investments to obtain a loan if servicing the loan is tight.

What do the changes mean for owner occupier buyers?
Predictions are that the owner occupier market will increase as a result of tightened criteria for property investment loans. Many lenders have recently announced a raft of changes to new owner occupier loans including lower interest rates, cash back offers and the waiving of annual fees.

Where to From Here?
While these changes affect banks and non-banks in different ways there are discounts that still can be found.

You can compare property investment loans at our mortgage comparison pages.

If you are looking for a home loan deals for owner occupied properties go to our compare home loans page.

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