Banks hike rates amid growing concern

One bank has made slight changes to its SVRs while another hikes its fixed-rate home loans and investment property loans

On Friday, UBank announced an increase of 0.10%p.a. on a number of its SVRs – Owner Occupier (OO), Investor (INV), Principal and Interest (P&I), and Interest Only (IO), which now takes the OO P&I loans to 4.17% p.a. and the INV IO/P&I and OO IO loans to 4.46% p.a.

The SVR changes will take effect on 2 December 2016 for new and existing customers.

Customers can still apply any discount they have off their SVR, such as the discount offer beginning day one, or the loyalty discount of 0.10% p.a. for customers who have held their home loans with the bank for three consecutive years.

“We consider any changes to pricing seriously, but due to a range of external factors at the moment and a need to achieve a balance between our home loan and deposit customers, it has been necessary for us to make changes to our SVRs. This ultimately allows us to continue offering our core banking products responsibly and sustainably to all of our customers –a commitment UBank takes very seriously,” says UBank CEO Lee Hatton, while maintaining that the bank still offers one of the lowest variable home loan rates and best deposit rates in the market.

The bank’s fixed rates remain the same. Customers who prefer locked-in fixed rate can consider UBank’s OO and INV fixed rates for both 1- and 3-year terms, which is at 3.69% p.a.
Meanwhile, Westpac has followed suit with its fixed-rate home loans and investment property loans.

Effective November 28, the bank is imposing higher rates for its two-, three- and five-year fixed-rate loans.

The five-year fixed-rate investment property loan will see the most increase – 60 basis points, and climb to 4.79 per cent. For home loans, interest rate is expected to reach 4.59 per cent following a hike of 54 basis points.

Meanwhile, the two- and three-year fixed-rate investment loans will rise by 30 basis points, while rates for home loans expect an increase of 24 basis points.

Last week, the Australian Financial Review reported that lenders were looking to raise costs by as much as 60 basis points for property buyers, following the “Trump effect” and the anticipation that central banks will soon aggressively rein in the persisting low rates.

Bank of Sydney has proceeded to increase its five-year fixed rates by 60 basis points as well, while Bank of Queensland raised theirs by 20 basis points, according to Canstar.

ME Bank has added 10 basis points to their variable rates, which was the first for variable rates in the latest round of increases.

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