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More lenders announce rate changes

by Reporter6 minute read
Pepper Money

A specialist lender has succumbed to wholesale funding pressures and lifted interest rates across its entire mortgage book, while a couple of non-majors decided to buck the trend.

Pepper Money has announced rate hikes of 17 basis points across its mortgage back book and 12 basis points across its front book, attributing its decision to higher wholesale funding costs.

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The new interest rates take effect from 22 March 2019.

The non-bank lender said it is “not immune” from wholesale funding pressures, but that it “held off” on raising rates for as long as it could.

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However, exceptions apply to borrowers experiencing financial hardship, borrowers with fixed rate loans, borrowers in the pipeline or where the settlement date is within three months of the effective date of the change, borrowers whose accounts are more than 90 days in arrears, and in cases where complaints are pending.

The rate changes follow Pepper Money’s announcement last month that it would be launching into the commercial real estate lending market with St. George Bank’s former head of commercial broking, Malcolm Withers, appointed as its first head of commercial.

Macquarie Bank

Macquarie Bank, on the other hand, announced reductions of between 5 and 20 basis points to some of its owner-occupied and investment loans.

Effective from last Friday (15 March), the new fixed rates for owner-occupied, principal and interest (P&I) loans are:

  • 3.88 per cent for one-year, two-year and three-year terms, and 4.19 per cent for four-year and five-year terms on loans with a loan-to-value ratio (LVR) of 70 per cent or less
  • 3.99 per cent for one-year, two-year and three-year terms, and 4.29 per cent for four-year and five-year terms for loans with an LVR of between 70 per cent and 80 per cent
  • 4.19 per cent for one-year, two-year and three-year terms, and 4.39 per cent for four-year and five-year terms for loans with an LVR between 80 per cent and 95 per cent

Macquarie’s fixed rates for owner-occupied, interest-only (IO) loans are:

  • 4.09 per cent for one-year and two-year terms, 4.19 per cent for three-year terms, and 4.39 per cent for four-year and five-year terms for loans with an LVR of 70 per cent or less
  • 4.49 per cent for one-year, two-year and three-year terms, and 4.69 per cent for four-year and five-year terms for loans with an LVR of between 70 per cent and 80 per cent

New fixed rates for investment P&I loans are:

  • 3.99 per cent for a one-year term, 4.19 per cent for two-year and three-year terms, 4.49 per cent for a four-year term, and 4.59 per cent for a five-year term for loans with an LVR of 70 per cent or less
  • 4.09 per cent for a one-year term, 4.29 per cent for two-year and three-year terms, 4.59 per cent for a four-year term, and 4.69 per cent for a five-year term for loans with an LVR of between 70 per cent and 80 per cent
  • 4.19 per cent for a one-year term, 4.39 per cent for two-year and three-year terms, 4.69 per cent for four-year terms, and 4.79 per cent for a five-year term for loans with an LVR of between 80 per cent and 90 per cent 

Updated fixed rates for investment IO loans are:

  • 4.24 per cent for a one-year term, 4.29 per cent for two-year and three-year terms, 4.59 per cent for a four-year term, and 4.69 per cent for a five-year term for loans with an LVR of 70 per cent or less
  • 4.79 per cent for one-year, two-year and three-year terms, and 4.99 per cent for four-year and five-year terms for loans with an LVR between 70 and 80 per cent 

Fixed rates for self-managed super fund (SMSF) loans have also been updated to:

  • 5.94 per cent for one-year and two-year terms, 5.99 per cent for a three-year term, 6.14 per cent for a four-year term, and 6.24 per cent for a five-year term for P&I SMSF loans
  • 6.34 per cent for one-year and two-year terms, 6.39 per cent for a three-year term, 6.54 per cent for a four-year term, and 6.64 per cent for a five-year term for interest-only SMSF loans 

ME Bank

Another non-major bank, ME, announced drops of up to 80 basis points across a range of home loan products. 

Effective from last Friday (15 March), the rate for owner-occupied P&I home loans with an LVR of more than 90 per cent has decreased from 5.26 per cent to 4.46 per cent for loans. 

The ME rate for investment P&I home loans with an LVR of between 80 per cent and 90 per cent has also been dropped from 4.62 per cent to 4.35 per cent.

[Related: Pepper to launch into commercial real estate space]

More lenders announce rate changes
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