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Australia's largest lender increases interest rates

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Julia Corderoy | 27 Jul 2015, 08:27 AM Agree 0
Australia's largest home loan lender is the second major bank to announce interest rate hikes for investment loans
  • Richard | 27 Jul 2015, 08:49 AM Agree 0
    Second major to take the cash grab option rather than LVR adjustments. I wonder if the TAB will be taking bets that Westpac & NAB follow suit in the next 5-10 business days. If second & third tier lenders don't take advantage of this there missing a significant opportunity.
  • Old Country Broker | 27 Jul 2015, 08:56 AM Agree 0
    Existing investment clients to get hit by the increase as well - talk about a cash grab. Both lenders increasing rates by .27%, seems a strange amount to increase, collusion anyone??
  • Luke | 27 Jul 2015, 08:58 AM Agree 0
    The banks can't go the hard line LVR approach as that would crash the OTP apartment market.
  • RC | 27 Jul 2015, 09:37 AM Agree 0
    Future borrowers of Investment loans. YES.
    Existing loans that have been in place. ? Where does that fit in with APRA'S concerns for future Resi investment borrowers. We are in a cycle that has no current past trends or history to observe. The likes of APRA, ASIC are walking on broken glass with what they are trying to control. The banks are grandstanding to look good in the regulators eyes, with the amazing ability to now "milk" more from the system. who are the TRUE Capitalist's in this case I ask?
  • Huh? | 27 Jul 2015, 09:46 AM Agree 0
    This is wrong on many levels. Fair enough new customers who can decide up front, but to penalise your existing clients no matter what LVR or risk... how can forcing existing customers slow (growth) in new investor lending?!! This hints of CBA playing games with the regulator to the detriment of their customers... Disgusting..
  • Tim H | 27 Jul 2015, 09:51 AM Agree 0
    Baa..nks behaving badly again.
    They're just like sheep playing follow the leader!!!!
  • Craig | 27 Jul 2015, 09:52 AM Agree 0
    Richard - that is true, but more importantly it's up to Brokers to use the 2nd & 3rd Tier Lenders. I know some brokers that don't even bother looking in that direction & ignore all correspondence just because it's easier to send it to a Major. Is that really looking after your customer?
  • Patrick | 27 Jul 2015, 10:53 AM Agree 0
    Uninformed comment. The capital adequacy change (risk weightings) will affect all banks identically and increase the rate required to achieve the same return on the increased capital required to back investment loans. I expect that existing fixed rate loans would be unaffected, but a variable rate loan is just that, variable at the bank's discretion. Grow up people.
  • Steve McClure | 27 Jul 2015, 11:24 AM Agree 0
    Hi Patrick, please respect people's opinion's as this is an unprecedented change that will cause confusion and some emotion. I understand & agree with your statement re the capital adequacy costs, but a 0.27% increase on a cost of funds around 3% is huge. That coupled with many lenders decision to pass on only 80% (across all loans) of the last RBA rate reduction means that revenue from investment loans will have increased in the vicinity of 10% (just rough estimate).

    If that's justified, consumers and lenders' business partners such as brokers, deserve more notice and a better explanation from the top rather than a blog. If its not justified, then there should be discounts on loans that put less pressure on capital adequacy ratios. I'd welcome the facts around this issue.
  • Broker | 27 Jul 2015, 12:23 PM Agree 0
    Collusion in legalised theft and little else.
  • Sasha | 27 Jul 2015, 02:36 PM Agree 0
    Increase to the new loans, fair enough, but to the existing investment clients who's looking for rental return, it will just pushing the investors to pass the extra cost onto their tenants, and then... more pressure on the renting households who's leaving under already bad enough economy, they can only blame the banks stole their milk.
  • daryn | 28 Jul 2015, 11:07 AM Agree 0
    Agree with most comments. Why punish existing clients with higher rates when APRA are concerned about future investment loans? Also, do you really think an investor is concerned about paying an extra 30 basis points for a loan? Clearly, the banks are going down this path as a grab for cash and increased margin. If they wanted to slow down investor loans, they would not do it by rate hikes, rather increasing benchmarks on servicing or lower LVR's for investor loans. Regardless, the smaller players/non banks not government by APRA will get a lot more business and great for potential refinances to lower rates to help or clients.
  • Papery | 29 Jul 2015, 02:33 PM Agree 0
    A housing led recovery or a property financing led crash....cant wait for next years PD days & how the Economic commentators have to say in respect of the stats & other data..

    and wasnt it Joe Hockey who said just a few short weeks ago that rates have never been this low so get out there & invest??
  • keith lomax | 13 Sep 2015, 11:07 AM Agree 0
    Bankwest have also increased there rate by .32%. In a letter I received from the bank they say it's ONE of the changes on the 11/9/15. I spent 40 minuets on the phone asking what the other changes are/would be and they were unable to answer. Eventually they said there was no other changes. I asked for this in writing BUT THEY REFUSED THIS, saying that a senior representative will ring me on Tuesday 15/9/15. I will be ringing them on an ongoing basis until this is put in writing and resolved to my satisfaction. I will be encouraging others with existing loans to take a stance on this as well.
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