Another lender has changed its interest rates, as banks are facing increased funding and regulatory costs.
Despite the Reserve Bank of Australia holding the rate for nearly two years, the last month has seen a number of banks increase rates.
AMP is the latest to change its variable lending rates for all owner occupiers and investors.
The changes include an increase of:
- 8 basis points for owner occupied principal and interest
- 17 basis points for owner occupied interest only
- 17 basis points for investment principal and interest
- 17 basis points for investment interest only
The changes are effective 13 July 2018 for new business and 16 July 2018 for existing business.
AMP Bank said in its statement that it hasn’t raised rates for existing customers for over 12 months.
AMP Bank group executive Sally Bruce confirmed these changes are driven by an increase in funding costs.
She said, “We are managing our portfolio in a very active market and our decisions on rates are never taken lightly.
“We have held off passing this cost on to customers for as long as we can and in fact have not increased interest rates for existing customers since June last year.
“With any change, we are focussed on balancing the interests of our customers, the regulator and our business."
AMP Bank continues to offer a competitive three-year fixed rate for owner occupied principal and interest customers at 3.79%.
Other banks to increase their rates recently include IMB, AusWide, ING and Bank of Queensland.
Lender boosts home loan rates
Interest rate hike due to funding costs
Lender rates could go up by 20bp, despite hold