These increases will see CBA raise principal and interest loan interest rates to 5.25 per cent for owner-occupiers and 5.80 per cent for investors. Interest only loan rates will also be increasing to 5.47 per cent for owner-occupiers and 5.94 per cent for investors.
Big Four Bank Rate Increases:
* Based on $500,000 principal and 30 year loan term.
What will this cost everyday Australians?
However, CBA and ANZ customers still have time to assess their existing loans and whether they’ll be better off switching.
In a statement made on Friday, Matt Comyn, CBA’s Group Executive for Retail Banking Services, announced the May 8 deadline has been put in place to minimise the impact for the majority of home loan customers.
“Rising costs and regulatory responsibilities mean we are increasing home loan interest rates” he said, regarding the cause of these rate increases.
These ‘regulatory responsibilities’ relate to increasing concerns about a property bubble in Australia. Australian Securities and Investments Commission (ASIC) chairman, Greg Medcraft, issued the warning at their recent annual forum in Sydney. ASIC are working with Australian Prudential Regulation Authority (APRA) to help mitigate these risks, such as encouraging responsible lending by curbing loans to investors.
Only last month CBA announced they were blocking the refinancing of some investor loans as a response to these regulations. CBA subsidiary, BankWest, also halted all investment lending to new borrowers.