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Bank hikes rates, reintroduces home loan fee

 

 

Bank hikes rates, reintroduces home loan fee

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Charbel Kadib Comments 0
— 1 minute read

A regional bank has increased interest rates on its investor loan products and has introduced an establishment fee on its owner-occupied home loans.  

Effective 1 December, MyState Bank has hiked variable rates on its investor home loan products by 10 basis points and has reintroduced a $600 establishment fee for owner-occupied loans with a loan-to-value ratio (LVR) of more than 90 per cent.

In a statement to The Adviser, MyState attributed its decision to lift investor home loan rates to the sustained rise in funding costs associated with the bank bill swap rate (BBSW).

However, the bank also noted its decision to reduce the three-year fixed rates on investor home loans by 20 basis points, also effective as of 1 December.  

“We have been living in a low-interest rate environment for the last three years, but as funding costs increase, MyState have marginally increased our investor home loan rates on 1 December, but we have reduced rates on selected fixed [rates].

“These changes are in line with the broader market.”

MyState’s investor principal and interest home loan rates now start from 4.09 per cent, with its new investor interest-only rates starting from 4.29 per cent.  

MyState’s decision is the latest of several out-of-cycle rate hikes from lenders, including three of the big four banks, in response to rising funding costs.

NAB is the only major lender that is yet to increase headline interest rates on its home loan products.

Despite the rises, the Reserve Bank of Australia (RBA) has held the official cash rate at 1.5 per cent, with the central bank claiming that there is no case for a “near-term adjustment”.

[Related: RBA pre-Christmas cash rate]

Bank hikes rates, reintroduces home loan fee
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Charbel Kadib

Charbel Kadib

Charbel Kadib is a journalist on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel held roles with public relations agency Fifty Acres, and the Department of Communications and the Arts. 

Charbel graduated from the University of Notre Dame Australia with a Bachelor of Arts (Politics & Journalism).

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