Newcastle Permanent raises rates on OO IO loans

by Malavika Santhebennur•05:45 AM, 31 Jan 2020•10 minute read

The building society has announced that it is increasing interest rates across a couple of its home loan packages.

Newcastle Permanent Building Society Ltd has advised that it has increased interest rates on two of its owner-occupied interest-only fixed home loan products.

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The increase, which came into effect on 30 January, does not apply to principal and interest loans.

Interest rates for the Premium Plus Package Fixed Home Loan and the Standard Fixed Interest Rate increased by 50 basis points across the different loan terms (ranging from one-year to five-year terms).

The changes mean that interest rates for interest-based repayments for the one-year Premium Plus Package Fixed Home Loan now starts at 3.49 per cent, while the rate for a two-year fixed home loan starts at 3.29 per cent and the three-year term at 3.39 per cent.

Both the four-year and five-year Premium Plus Package Fixed Home Loan start from 3.83 per cent.

Meanwhile, the one-year fixed home loan rate for the Standard Fixed Interest Rate for interest-based repayments now starts at 3.59 per cent.

Early in January, The Adviser reported that Newcastle Permanent had clarified it is still accepting applications for owner-occupied interest-only loans, after a message was sent to brokers stating otherwise.

The firm earlier issued a communication to some brokers that, effective immediately, it would “temporarily not be accepting applications for owner-occupied interest-only loans”.

However, the lender issued a follow-up update confirming it was still accepting these applications.