Virgin Money has introduced rate increases for new high LVR lending and new and existing interest-only lending.
Effective 7 July, Virgin Money customers will see the variable rate for new loans with LVRs 90.01 per cent and above grow to 4.84 per cent per annum (p.a.), regardless of loan size.
As a result, for loans between $75,000 and $499,999, the new variable rate is 35 basis points higher, while for loans of $500,000 to $749,000 the increase is 40 basis points. Loans of $750,000 and above will see a hike of 45 basis points.
Fixed rates for new one to five-year loan terms with LVRs over 90 per cent have also jumped by 20 basis points, bringing one-year term rates to 4.44 per cent p.a., two and three-year terms to 4.19 per cent p.a., four-year terms to 4.54 per cent p.a. and five-year terms to 4.69 per cent p.a.
As of 8 August, standard variable rates for new and existing interest-only loans for both owner-occupier and investors will jump by 0.25 per cent p.a.
Rates for existing owner-occupiers will grow to 4.89 per cent p.a. while rates on existing investment loans will reach 5.19 per cent p.a.
For new owner-occupied interest-only loans with LVRs up to 70 per cent, rates differ between loan sizes. Owner-occupier loans between $75,000 and $499,000 will grow to 4.39 per cent p.a., while those of $500,000 to $749,999 will reach 4.34 per cent p.a. and those of $750,000 and above will tick up to 4.29 per cent p.a.
Investment interest-only loans with LVRs of up to 80 per cent will see the new rates differ depending on loan size. Loans of $75,000 to $499,000 will rise to 4.69 per cent p.a. while those of $500,000 to $749,999 will reach 4.64 per cent p.a. and those of $750,000 will hit 4.59 per cent p.a.
The rate hikes follow a spate of out-of-cycle increases on interest-only loans across Australian lenders. The hikes follow regulatory directives to curb interest-only lending, as well as the introduction of a major bank levy, although many banks have denied a connection.
The lender also introduced new special offers for two and three-year fixed principal and interest investment loans (with LVRs of 90 per cent or less) and owner-occupied loans, for borrowings of $300,000 and above.
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