Why you've got a $372 hole in your pocket today

RateCity StaffNov 19, 2015( 4 min read )

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Home Loans

CQU property expert reveals home truths on housing affordability

It’s never been harder for younger Australians to enter the property market, we regularly hear.

Mar 7, 2019( 4 min read )

Home Loans

What is the Reserve Bank's official cash rate and why should I care?

The Reserve Bank of Australia’s official cash rate is the overnight money market interest rate that the RBA charges on overnight loans to commercial banks.

Dec 1, 2017( 2 min read )

Home Loans

How to take advantage of record low mortgage rates

The RBA’s decision to leave the cash rate on hold at 2 per cent for the 10th month in a row is unsurprising, to say the least, but little comfort for mortgage holders struggling to get ahead on their home loan repayments. One of the best ways to prepare for an increase in rates is to switch to one of the lowest interest rates on the market and put the savings you make towards additional repayments on your loan. Not only will this help pay down your loan faster, it will also reduce the amount of interest you pay your bank over the life of your loan by tens of thousands of dollars.

Feb 29, 2016( 3 min read )

Home Loans

How will the big four's interest rate increases affect you?

Yet another of the big four banks has increased home loan rates, with Commonwealth Bank of Australia (CBA) raising borrowing costs for owner-occupiers and property investors.

Mar 28, 2017( 2 min read )

The overwhelming majority of Australian mortgage holders will be hundreds of dollars worse off from today as lenders hike their variable interest rates.

RateCity research shows that ‘Rate Hike Friday’ will hit mortgage holders by an average of 0.17 percentage points, or $372 per year on a $300,000 home loan.

The hikes come against a backdrop of rate cuts from the Reserve Bank and in the lead up to Christmas when spending typically goes up, rather than down.

There is, however, a silver lining, if customers are willing to stretch their legs.

At least 24 lenders have dropped their variable rates for owner occupiers but people have to be willing to switch banks, because all but one of these lower rates are not available to existing customers.

The rush of ‘new customers only’ bargain basement rates proves that loyalty is no longer even a consideration when it comes to getting one of the cheapest rates on the market.

Just one bank in the RateCity research, CUA, is dropping its basic variable rate for existing customers as well as new ones.

For investors, things aren’t looking as bright.

The chances are today’s hike is the second they’ve had in the last few months after half of the banks brought in higher home loan rates for investors than owner-occupiers.

This double whammy for investors has started to add up, with the gap between investor rates and owner-occupier rates now as wide as 1.44 percentage points.

The latest ABS data shows that this investor change is having an impact on buyer behaviour – last month saw the biggest monthly decline in investor borrowing since 2008.

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VARIABLE RATE HIKES

Lender	Increase	Old standard variable rate	New standard variable rate	Effective date
Adelaide Bank (smartfit loan)	0.12	4.14	4.26	20-Nov-15
AMP Bank (owner-occ)	0.18	5.55	5.73	20-Nov-15
ANZ	0.18	5.38	5.56	20-Nov-15
Bank of Queensland	0.18	5.56	5.74	20-Nov-15
Bank of SA	0.15	5.52	5.67	20-Nov-15
Bankwest	0.18	5.47	5.65	17-Nov-15
Bank of Melbourne	0.15	5.45	5.60	20-Nov-15
Bendigo Bank	0.12	5.56	5.68	20-Nov-15
Citibank	0.2	5.74	5.94	30-Oct-15
Commonwealth Bank	0.15	5.45	5.60	20-Nov-15
CUA	0.13*	4.93	5.06	24-Nov-15
ING	0.18	4.84	5.02	15-Jan-16
Macquarie	0.2	5.5	5.70	20-Nov-15
ME Bank	0.2	4.88	5.08	20-Nov-15
NAB	0.17	5.43	5.60	12-Nov-15
St George	0.15	5.54	5.69	20-Nov-15
Suncorp	0.16	5.54	5.70	20-Nov-15
Westpac	0.2	5.48	5.68	20-Nov-15

RATE CUTS

Lenders who have cut owner occupied variable rates since July

Lender	Biggest Cut
AMP Bank	-0.13% Including rate increase on 20 Nov 2015
Aussie	-0.23%
Bank Australia	-0.12%
Bankwest	-0.26% Including rate increase on 17 Nov 2015
Beyond Bank	-0.15%
Community First CU	-0.26%
CUA	-0.14% Starts 24 Nov 2015 for all variable customers
Easy Street Fin Services	-0.26%
Encompass Credit Union	-0.20%
Greater Building Society	-0.35%
Heritage Bank	-0.21%
Homeloans	-0.30%
HSBC	-0.13%
Hunter United	-0.05%
ING DIRECT	-0.30% Rate will go up 0.18% on 15 Jan 2016
ME Bank	-0.39% Including rate increase on 20 Nov 2015
Mortgage HOUSE	-0.08%
MyState	-0.12%
Pacific Mortgage Group	-0.09%
Reduce Home Loans	-0.04%
State Custodians	-0.10%
Suncorp Bank	-0.10%
The Rock Building Soc	-0.12%
UBank	-0.10%

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Why you've got a $372 hole in your pocket today

Related articles

CQU property expert reveals home truths on housing affordability

What is the Reserve Bank's official cash rate and why should I care?

How to take advantage of record low mortgage rates

How will the big four's interest rate increases affect you?

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