New year, new home loan rate hikes
Banks have started 2017 by hiking variable home loan rates.
Home loan interest rates began to move upward in the wake of December’s RBA meeting which saw the Reserve Bank leave the official cash rate untouched at 1.50%. While lenders began their round of rate rises with fixed rate products, an increasing number of lenders are now announcing out-of-cycle variable rate moves.
Virgin Money announced it would raise both fixed and variable rates on some of its products for owner occupiers and investors from 6 January. The lender lifted its three-,four- and five-year fixed rates by 20 basis points for owner occupiers, and raised investor four-year fixed rates by 24 basis points and five-year fixed rates by 19 basis points. It also lifted variable rates by 10 basis points for both owner occupiers and investors.
Virgin Money coupled its rate rises with a significant rate cut for some fixed rate products. The lender trimmed its one-year fixed rate by 16 basis points for owner occupiers and by 21 basis points for investors. It also dropped its two-year fixed rate by 26 basis points for owner occupiers and 30 basis points for investors.
ME also announced it would move on variable rates, effective from 4 January. The bank lifted variable rates by 10 basis points for both owner occupiers and investors. The changes apply to the lender’s Basic Home Loan, Flexible Home Loan and Flexible Home Loan with Member Package.
Suncorp has also lifted variable rates, with changes to come into effect from 23 January. The bank will raise owner-occupier variable rates on its Back to Basics and Standard Variable products by 15 basis points. However, Suncorp said it would also reverse 15 basis points of reductions to interest rates on its 55 Plus savings accounts.