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Bank hikes fixed home loan rates

by Charbel Kadib10 minute read
fixed home loan rates

A non-major lender has increased fixed rates across its owner-occupied and investment products in response to a rise in funding costs.

Teachers Mutual Bank Ltd (TMBL) has raised interest rates across two and three-year fixed owner-occupied and investment home loans by 5 bps, effective 7 May.

TMBL’s fixed rates now start from 2.19 per cent (3.65 per cent comparison rate) for owner-occupiers, and from 2.34 per cent (3.88 per cent comparison rate) for investors.

The changes apply across all TMBL brands, which include Firefighters Mutual Bank, UniBank and Health professionals Bank.


TMBL’s head of third party distribution, Mark Middleton, told The Adviser that the bank’s fixed-rate pricing had sparked a 300 per cent increase in monthly home loan volumes.

However, Mr Middleton said that “upon reviewing the cost of funding”, the bank decided to implement what he described as a “very small” increase to its interest rates.

Mr Middleton added that as a “gesture of good will”, TMBL would not apply the rate hike to loans submitted by 6 May and settled within 90 days.

“This decision has been made as a one-off, and we would encourage future applications to apply for rate lock, so [brokers’] clients can lock in the rate on application for 90 days,” he said.

TMBL’s decision bucks the current mortgage rate trend, with several lenders reducing both fixed and variable rates following the Reserve Bank of Australia’s (RBA) cuts to the cash rate in March.

This is the latest among a number of changes to TMBL’s home lending proposition, which include a broadening of the bank’s membership criteria and a tightening of credit policy.

Most recently, TMBL announced it would cease lending for off-the-plan property purchases in response to growing credit quality risks emerging from the COVID-19 crisis.

TMBL also lowered the threshold on several secondary income types for home loan serviceability assessments.

Following such changes, Mr Middleton said: “These changes have been made to promote the sustainability of our book throughout this crisis.”

“All of our four divisions have a solid volume of loans coming in at present, and we want to continue to encourage loan applications with strong credit quality.

“As always, we will continue to monitor the situation and consider all environmental factors when reviewing our policy.”

[Related: TMB ceases lending for off-the-plan purchases]

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Charbel Kadib


Charbel Kadib is the news editor on The Adviser and Mortgage Business.

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

Email Charbel on: [email protected]