Home Loan Market Update – September 2018
Quick Summary
Over the last few weeks, there have been announcements that lenders are continuing to increase their home loan rates without waiting for the Reserve Bank of Australia (RBA).
This is due to the fact that the RBA’s official cash rate is still at 1.50%. The lowest it has ever been. The rate increases are mainly on variable rate home loans. However, we expect to see an increase in all mortgage rates in general.
Latest Announcements
Since the recent home loan rate increases in June and July this year, banks have followed suit in increasing their home loan rates. Westpac had announced last week that they were increasing their home loan variable rates by 0.14%, which took effect last week on the 19th of September. This also applies to the Westpac-owned St George Bank.
ANZ had also announced early this month that they were increasing their home loan variable rate. The increase will be at 0.16%, to take effect on the 27th of September. CBA followed with their own home loan rate increase announcement, advising they will be increasing their home loan variable rates by 0.15%, to take effect on the 4th of October.
The latest to make an announcement was ING, where they announced yesterday that it would increase their investment loan variable rates by 0.15%. The increased rates will take effect next week, 25th of September.
Rate Increase Overview
The table below will give you an overview of the changes in variable home loan rates in the last 30 days or so.
| Lender | Loan Type Affected | Rate Increase | Effective from |
|---|---|---|---|
| ING | Investment Loan Variable | 0.15% | 4 Oct 2018 |
| CBA | All Variable | 0.15% | 4 Oct 2018 |
| ANZ | All Variable | 0.16% | 27 Sep 2018 |
| St George | All Variable | 0.14% | 19 Sep 2018 |
| Westpac | All Variable | 0.14% | 19 Sep 2018 |
| NAB | – | No increase | – |
| Virgin Money | Owner Occupied <$500K | 0.05% | 27 Aug 2018 |
| Macquarie | Owner Occupied P&I | 0.06% | 23 Jul 2018 |
| Owner Occupied IO | 0.10% | 23 Jul 2018 | |
| All Investment | 0.10% | 23 Jul 2018 | |
| AMP | Owner Occupied P&I | 0.08% | 16 Jul 2018 |
| Owner Occupied IO | 0.17% | 16 Jul 2018 | |
| All Investment | 0.17% | 16 Jul 2018 | |
| ING | Existing Owner Occupied Variable (loan settled before 3 Jul 18) | 0.10% | 3 Jul 2018 |
| Citibank | All Variable | 0.10% | 8 Jun 2018 |
Please keep an eye on this page, we will update it when Lenders make their rate announcements.
What You Need To Do
As per our advice from earlier in the year, if you’re using an Interest Only Home or Investment Loan, you need to:
- Speak with your Accountant – Check with your Accountant first to see if you are better off staying with your current Interest Only loan or switching to a Principal and Interest loan at a lower rate. While you can save on the interest paid by switching to a P&I loan on a lower rate, there maybe unintended tax implications. Best to seek professional advice first.
- Speak with your Mortgage Broker – If your Accountant advises that you are better off on a P&I loan, contact your Mortgage Broker / Loans Advisor. They should be able to help you identify the loan product that best suits your current needs.
- Review your loan – Contact your Mortgage Broker / Loans Advisor in order to organise a loan review. There maybe newer products on the market that are more suited to your current needs.
Remember, product, facility and bank policies all have to be able to help you achieve your financial goals. Every Lender has their pros and cons and everyone’s situation is different. What works for one Borrower, may not work for another.
