Major bank ups investor rates, cuts owner occupier rates

by Julia Corderoy04 Aug 2015
Westpac has finally announced increased rates on investment loans, becoming the last major bank to announce mortgage repricing in response to APRA’s crackdown on growth in investment lending.

The standard variable interest rate on Westpac residential investment property loans for new customers will increase by 27 basis points to 5.75%, effective 10 August 2015. For existing customers the increase will be effective 25 September, 2015. 

Fixed rates on residential investment property loans will increase by up to 30 basis points, effective 4 August 2015.

However, the major bank will decrease fixed rates on owner occupier home loans by up to 30 basis points, effective 4 August 2015.

“Today's announcement is an important step in ensuring that Westpac meets APRA's benchmark that investor credit growth should be no more than 10%,” Westpac consumer bank chief executive, George Frazis said.

“We have already introduced a range of initiatives, including increasing the deposit required for investment property loans to 20 per cent as part of our commitment in meeting APRA's benchmark.

“However, we are pleased to be able to reduce fixed rates on owner occupier loans. We know that the dream of many Australians is to get into their own home and the new lower fixed rates will benefit customers that are looking for security and peace of mind about their loans and monthly repayments.”

In addition, Suncorp Bank has also announced it will increase its standard variable, back to basics and access equity line of credit rates for investor loans by up to 27 basis points.

The non-major’s investment standard variable rate and access equity reference rate will increase to 5.81%. Its investment back to basics variable rate will increase to 5.23%. Variable rates on owner-occupied loans will remain unchanged.

The increased rates, effective 31 August 2015 will apply to both new and existing investor loans.


  • by GC 4/08/2015 12:09:19 PM

    Are the reductions for owner occupied loans going to be automatically given to existing customers? Doubt it.

    APRA , the Govt and particularly the banks should all hang their heads in shame.
    They have all shown absolute disdain for the general public - not just investors.
    APRA have used a sledge hammer approach to try to show they can control a market they cant possibly control - a market that will continue its typical cycle. The Govt has started this whole train in motion and have clearly NOT listened to the right people.

    The banks have shown how greedy they are and are trying to buy public favour by stating they will reduce O/O loans (future loans only). They are sitting in their offices rubbing their hand together thinking the GOOD TIMES ARE BACK - greed IS good.

    One thing that concerns me is that APRA clearly haven't given any thought to. Their focus is to reign in property growth and valuations - as they clearly believe we are in a "BUBBLE". What happens to the debt / equity ratios with the banks? Will their actions inadvertently leave us with a USA scenario where we end up with negative equity in our property?

    At the end of the day I doubt this whole exercise will make that much of a difference. Investors will sit back, re-assess and continue to invest in their chosen vehicle.
    Interest Rates are only part of the investing picture. I remember the days thing any rate below 7% was great - and I made money on property even then.

    We invest in property for the long term and nothing APRA do will (hopefully) stop property from increasing in value. I say to all investors - take stock and get out their and keep doing what you have been doing. It's your retirement you are working for not APRA's.