Investors and owner-occupiers who opt for interest-only will have to stump up an extra $102 a month, or $1,224 a year, based on the average loan size of $350,000 over 30 years.
Owner-occupiers paying principal and interest have been given a small reprieve with $17 a month off their repayments, a saving of $204 a year.
Regulator impacting the mortgage market
RateCity money editor Sally Tindall said today’s changes were once again attributed to APRA’s new regulatory requirements.
“An astounding 41 per cent of loans on the big four banks’ books are interest-only. That’s a huge proportion of Australians who aren’t paying off a single cent of debt.
“It’s no wonder APRA is coming down hard. They want Australian mortgage holders to go on a debt diet.
“Paying interest-only, particularly when you are an owner-occupier, is an expensive business.
“The average owner-occupier who elects to pay interest-only for the first five years of their loan will pay $67,810 extra to NAB over the life of their loan.
“When you look at the big picture, a couple of hundred dollars in savings each month pales in comparison to the long-term benefits of paying down debt,” she said.
NAB standard variable rate changes
|Old rate||New rate||Change||Old monthly repayments||New monthly repayments||Monthly change|
Big four banks – current standard variable rates
|Owner-occupier P&I||Owner-occupier IO||Investor P&I||Investor IO|