Westpac hikes up interest-only home loan rates
Westpac has claimed that the decision didn’t come as a result of the Federal Government’s banking levy.
The bank announced yesterday that it will hike interest-only rates by 34 basis points for both owner occupiers and investors. The move comes after Westpac last month lowered the maximum loan-to-value ratio on interest-only loans from 95% to 90%.
The bank also cut rates by 8 basis points for customers on principal and interest loans. These interest rate moves will take effect on 30 June 2017.
“We hope the rate reduction will encourage owner occupier customers with interest-only home loans to switch to principal and interest repayments, helping them to pay down their home loan sooner in this low interest rate environment. There will be no switching fee,” Westpac Consumer Bank chief executive George Frazis said.
Frazis has said that the changes were made in response to a 30% cap on interest-only lending put in place by the Australian Prudential Regulation Authority (APRA). He claimed that the move was not a response to the Senate’s passage yesterday of a $6.2 billion levy on Australia’s major banks.