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.