Virgin Money is the latest to join the ranks of lenders raising rates on interest-only loans, increasing fixed rates by up to 50 basis points.
Effective 8 August, fixed interest-only (IO) rates will be raised by between 0.15 per cent per annum (p.a.) and 0.50 per cent p.a. for both owner-occupied and investment loans.
New investor clients (with loan-to-value ratios of 80 per cent and lower) with one, two and three-year terms will see rates start from 4.49 per cent, following increases of 0.15 per cent for one-year terms, 0.44 basis points for two-year terms and 0.35 per cent for three-year terms.
Investor clients opting for four-year terms will see rates of 4.89 per cent p.a., while five-year terms will grow by 40 basis points to 4.99 per cent.
Meanwhile, owner-occupiers with LVRs of 70 per cent will have a rate of 4.39 per cent p.a., reflecting hikes of 0.15 per cent for one-year terms and 0.40 per cent for two-year terms.
Owner-occupier loans on three-year terms will see rates increase by 0.50 per cent to 4.49 per cent p.a., while four-year terms will have a new rate of 4.69 per cent as a result of a 35 basis point increase. Five-year terms will see rates grow by 0.30 per cent to 4.79 per cent p.a.
The lender added that, as of the same date, it will not accept rate lock for pre-approval applications or off-the-plan purchases.
Virgin Money is also introducing changes to standard variable rates on 8 August, as announced in early July.
[Related: Virgin Money hikes IO and high LVR rates]
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