Bank of Queensland is the first bank to officially hike home loan rates out of cycle in 2019.
Today’s announcement affects a range of BOQ variable rate loans including their Economy Variable Home Loan which is increasing by 0.11 per cent for new and existing customers.
Other loans are increasing by up to 0.18 per cent, effective from this Friday, however there is no change for homeowners with a BOQ Clear Path owner occupier principal and interest loan.
RateCity.com.au research director Sally Tindall said the bank has cited cost of funding pressures and intense competition in term deposits as the reasons for the hike.
“These cost of funding pressures are affecting most banks so it’s likely we’ll see other lenders follow suit in 2019,” she said.
“Meanwhile the banks have lost potential customers as a result of the falling property market and the tightening of serviceability requirements, both of which are also putting pressure on their bottom line.
“While banks are entitled to make a profit, some Bank of Queensland customers will be disappointed with today’s decision to increase interest rates.
“A lot of household budgets are feeling the pinch after Christmas. While most families will be able to absorb this hike, some may struggle to come up with the extra cash,” she said.
Bank of Queensland is the ninth largest mortgage lender in Australia, according to APRA.