One of Australia’s largest banks has revealed that it will follow the majors by lifting its variable rates by more than 30 basis points over the coming weeks.
St.George Bank yesterday announced that its variable residential investment property loan rate will increase by 0.31 per cent to 5.98 per cent per annum for customers with interest-only repayments.
Variable residential investment property loan rates will increase by 0.23 per cent to 5.78 per cent per annum for customers with principal and interest repayments.
The lender’s variable home loan (owner-occupier) rate will increase by 0.08 per cent to 5.50 per cent per annum for customers with interest-only repayments.
Meanwhile, St.George said that its variable home loan (owner-occupier) rate will remain unchanged at 5.30 per cent per annum for customers with principal and interest repayments.
These changes are effective 8 May 2017.
St.George’s rates on variable lending products for small businesses will also increase by 0.08 per cent, effective 3 April 2017.
The lender’s changes come after all of the big four banks last week announced out-of-cycle interest rate changes, as lenders respond to pressure on funding costs and increasing investor appetite.
Commonwealth Bank was the last of the big four to announce changes, when it revealed on Friday (24 March) that it would be increasing interest-only investment home loans by 26 basis points to 5.94 per cent per annum, as well increasing owner-occupier interest-only rates by 25 basis points to 5.47 per cent per annum.
ANZ also announced on Friday that it would be increasing variable interest rates for investors to 5.85 per cent, while investors with interest-only home loans will see their rates rise to 5.96 per cent from 22 April, among other changes.
Effective from last Friday (24 March), Westpac’s variable interest rates for P&I and interest-only investment loans rose to 5.79 per cent and 5.96 per cent, respectively, and its SMSF investment property fixed rates (P&I) increased by up to 100 basis points.
Meanwhile, NAB’s variable rate for residential investment home loans also increased last week, rising by 0.25 per cent to 5.80 per cent per annum.
Other lenders have also followed suit, with non-bank lender Homeloans announcing that its Optima product rates were increasing and Bendigo Bank announcing a 25-basis point increase in its residential investment variable rate to 6.01 per cent from 31 March.
Challenger bank AMP said that effective from Friday 31 March, new customers of the lender’s owner-occupied principal and interest (P&I) variable rate loans will be subject to 3.92 per cent per annum rate for loans of $750,000 and above (an increase of 7 basis points).
[Related: AMP increases P&I and interest-only rates]