State Custodians has announced it will increase interest rates on variable home loans by 0.10 percentage points, effective 17 April 2018.
The changes will see State Custodians’s competitive owner-occupier principal and interest rate lift to 3.64 per cent, and its interest-only rate increase to 3.89 per cent. Investor mortgage rates will also rise to 3.89 per cent for principal and interest loans and 4.14 per cent for interest-only loans.
State Custodians is the second Australian lender to lift mortgage rates in as many months, following Suncorp’s decision to hike in March. At the time, Suncorp cited higher funding costs as the catalyst for the rate rise.
RateCity money editor, Sally Tindall, said borrowers should prepare for higher rates as more banks lift out of cycle with the Reserve Bank:
“Australian banks are facing increasing global funding pressures, so it was only a matter of time until our banks passed it on to customers in the form of higher rates.”
“Two lenders so far have increased rates, but it signals the end of historically-low home loan rates here. It’s highly likely that more banks will follow suit soon.”
For a $350,000 30-year home loan (owner-occupier paying principal and interest), the rate increase equates to an additional $20 per month or $7076 over the life of the loan.
|State Custodians product||Loan purpose||Repayment type||Current rate||Increase||New rate|
|Low rate home loan (up to 80% LVR)||Owner occupier||P&I||3.54%||0.10%||3.64%|
|Low rate home loan (up to 80% LVR)||Owner Occupier||IO||3.79%||0.10%||3.89%|
|Low rate home loan (up to 80% LVR)||Investor||P&I||3.79%||0.10%||3.89%|
|Low rate home loan (up to 80% LVR)||Investor||IO||4.04%||0.10%||4.14%|