10 lenders have moved their rates over the last week
Official interest rates haven’t moved for some 23 months. However, the big banks are under increasing pressure to move interest rates as more lenders make changes in response to increased costs.
Over the last week ten institutions have changed their interest rates to home loan products.
While we have seen several rates increases over the last few weeks, despite the Reserve Bank of Australia holding the cash rate, not all the changes have been increases.
Mortgage House dropped its fixed rate investment products by 61 to 72 bps. It also made some changes to its owner occupier fixed rate products with interest rate decreases of 8 to 26bps.
Westpac also made changes this week. It increased its owner occupier fixed rate interest only home loans by 5 to 15bp.
Suncorp also made changes to its fixed rate products, decreasing the rates of its investment loans by 10 to 40bps.
The upward pressure is mounting, and at the same time the banks want to hold some competitive rates in the market.
The cost of wholesale funding is rising, which ultimately must find its way through to home loan rates. At this stage it is the second-tier banks that have increased their variable rates by 8 to 10 basis points, not the big banks.
The funding pressure sees some fixed rates rising, while other banks have moved down to maintain a competitive rate in the market for new business as they have increased their variable rates across the book for both the existing and new.
So far it has been the ‘second-tier’ banks changing variable rates, the big banks are under even more pressure.
With around 80% of existing loans provided by the big four and the bulk in variable rates, any move in variable rates is going to flow through to most Australian borrowers.
Is it time to look at your loan structures and rates?
Contact me on 0418 903 954 or email donna-lee@celsiusfinance.com.au for a review.
Donna-lee Parkes
Credit Advisor
Celsius Finance