Mortgage rate hikes continue, with UBank and Virgin Money raising some rates by 20 basis points

Posted: 14 January 2019 8:46 am
News

Dominoes falling against a house.

BankWest and BankVic have actually lowered some of their mortgage rates.

UBank today raised rates on some of its interest only investor loans by 20 basis points. It's joined by Virgin Money, which is raising rates on multiple Reward Me home loans.

Bank of Queensland made the news last week when it announced it was increasing selected interest rates in order to deal with rising funding costs. This was a common explanation for a string of rate rises last year.

And now it looks to be an early trend in 2019.

Who's raising rates?

UBank

UBank raised its 1, 3 and 5 year fixed investor interest only rates by 20 basis points today.

Virgin Money

Virgin Money raised rates for new lenders on multiple Reward Me home loans, between 5 and 20 basis points last Friday.

Bank of Queensland

This lender kicked off the latest round of rate moves last week, raising owner occupier and line of credit rates by 11 to 18 basis points last Friday.

Crunching the numbers

A 20 basis point rate rise can increase your mortgage repayments significantly. Here's an example calculation:

  • The average Australian home loan size (according to the latest ABS statistics): $386,300
  • Loan term: 30 years
  • Interest rate: 3.80%
  • Monthly repayment = $1,799

But if your rate went up by 20 basis points it would look like this:

  • Interest rate: 4.00%
  • Monthly repayment = $1,844

That's an extra $540 a year and enough to put serious strain on some borrowers.

But it's not all rate hikes. Bankwest and BankVic have actually lowered interest rates in the past week.

Bankwest

BankVic

BankVic lowered a range of fixed rate products by 5 to 20 basis points.

With the Reserve Bank not meeting until February and funding costs continuing to weigh on lenders, we can expect a lot more rate movements up and down over the coming month. As always, borrowers need to keep an eye on their mortgage rate and switch to a lower one. The savings can quickly add up to thousands of dollars.

Worried about rate rises? Compare and switch to a lower rate

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Rates last updated December 12th, 2019
$
% p.a.
Offset account
Split account
Loan type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Maximum Insured LVR Amount Saved Short Description
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
2.99%
3.01%
$500 (waived for loans above $150,000)
$0 p.a.
80%
Online only cashback offer: Refinancers borrowing $250,000 or more can get a $4,000 cashback for their first application (Other terms, conditions and exclusions apply). Buyers and refinancers can get this competitive variable interest rate. Application fee waived for loans above $150,000.

UBank UHomeLoan Variable Rate - Discount offer for Owner Occupiers, P&I Borrowing over $200,000
2.84%
2.84%
$0
$0 p.a.
80%
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
loans.com.au Smart Home Loan - (Owner Occupier, P&I)
2.88%
2.90%
$0
$0 p.a.
80%
Get one of the lowest variable interest rates on the market and pay 0 application or ongoing fees.
Virgin Reward Me Fixed Rate Home Loan - 2 Year $300k+ Special offer (Owner Occupier, P&I)
2.79%
3.30%
$0
$10 monthly ($120 p.a.)
80%
Buy your home and lock in a low rate for the first two years. Available with a 10% deposit.
State Custodians Low Rate Home Loan with Offset - LVR up to 70% (Investor, P&I)
3.08%
3.10%
$0
$0 p.a.
70%
A competitive rate with no application or ongoing fee.
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR<=90% Incl. LMI (Owner Occupier, P&I)
3.03%
3.04%
$0
$0 p.a.
90%
Get one free online redraw per month and pay no ongoing fees. Application fees are waived for loans above $150,000.
State Custodians Low Rate LOC - LVR up to 70% (Owner Occupier, IO)
3.08%
3.10%
$0
$0 p.a.
70%
Withdraw up to 70% of your home equity with this competitive line of credit loan.
State Custodians Low Rate Home Loan with Offset - LVR up to 80% (Owner Occupier, P&I)
2.90%
2.92%
$0
$0 p.a.
80%
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments.
Bank of Melbourne Basic Home Loan - LVR above 60% up to 80% (Owner Occupiers, P&I)
2.99%
3.01%
$500 (waived for loans above $150,000)
$0 p.a.
80%
Online cashback offer: Refinancers borrowing $250,000 or more can get a $4,000 cashback for their first application (Other terms, conditions and exclusions apply). A low variable interest rate for home buyers and refinancers. Application fee waived for loans above $150,000.
State Custodians Low Rate Home Loan with Offset - LVR up to 70% (Owner Occupier, P&I)
2.83%
2.85%
$0
$0 p.a.
70%
A competitive rate with no application or ongoing fee.

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