The lender has announced that, from 5 April, it will increase the interest rate on three-year fixed rates for investors and variable rates for new owner occupiers with LVRs over 90 per cent.
Virgin Money has said that the following changes will be made to its Reward Me Home Loan from Wednesday, 5 April:
The latter change will bring the new interest rate to 4.49 per cent p.a for borrowings between $75,000 and $499,999; 4.44 per cent for borrowings between $500,000 and $749,999; and 4.39 per cent for borrowings over $750,000.
The changes follow on from a range of rate hikes in recent weeks, and a crackdown on investor lending from APRA.
The latest measures build on those communicated to authorised deposit-taking institutions (ADIs) in December 2014, aimed at improving the quality of new mortgage lending generally and moderating the growth of investor lending in particular.
According to the regulator, this increased scrutiny has been in response to “an environment of heightened risks, reflected in an environment of high housing prices, high and rising household indebtedness, subdued household income growth, historically low interest rates, and strong competitive pressures”.
APRA has therefore written to ADIs advising that it expects the banks to:
[Related: Banks move on interest rates out of cycle]
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