The official cash rate has been kept on hold by the Reserve Bank for the fourth month running, but the same cannot be said for mortgage rates, with several lenders making fixed and variable rate changes this week.
From Oct. 2 to 9, two lenders – Great Southern Bank and Queensland Country Bank – raised eight owner-occupier and investor variable rates by an average 0.16%, while three – Great Southern Bank, Resi, and Yellow Brick Road – cut six of theirs by an average 0.2%.
Over the same period, three lenders – Macquarie Bank, MyState Bank, and Queensland Country Bank – lifted 45 owner-occupier and investor fixed rates by an average of 0.19%, while two – Bank First and MyState Bank – had 32 of theirs slashed by an average 0.22%.
See the table below for the summary of fixed and variable rate changes this week.
Canstar’s database showed the average variable interest rate for owner-occupiers paying principal and interest is 6.67% at 80% LVR, with Arab Bank offering the lowest variable rate for any LVR at 5.45% for LVRs up to 60%.
Canstar’s database also showed that nine rates were below 5.5%, down from 10 the week prior. The rates were from Arab Bank Australia, Australian Mutual Bank, LCU, RACQ Bank, and Regional Australia Bank.
For the lowest owner-occupier home loan rates, see the table below.
Effie Zahos (pictured above), Canstar’s editor-at-large and money expert, reminded potential home buyers to consider strata fees when purchasing an apartment.
“Apartments may be a more affordable option than houses, but it’s important home buyers take into account the strata fees,” Zahos said. “Not only can they add to the cost of owning the property, but they can also eat into your borrowing power.
“Typically, lenders add strata costs on top of living expenses when assessing loan applications so you may find your borrowing power drops. The higher the levies, the bigger the potential impact.”
Canstar crunched the numbers based on a single person on a $95,600 income with annual living expenses totalling $21,840 and found that annual strata fees of $2,500 could potentially cut their borrowing power by $25,000 to $340,000. And if the strata costs were $7,500 a year, the same person could now only borrow $292,000, which is $73,000 less.
“Those thinking about buying a unit should talk to their lender or mortgage broker to get a clearer picture of what impact strata fees might have on their borrowing capacity,” Zahos said.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
