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Lenders change home loan rates

by Reporter5 minute read
Heritage Bank

Heritage Bank has lifted variable interest rates on some home loan products, while Bluebay Home Loans has joined the fixed-rate-cutting frenzy.

Heritage Bank has revealed rate hikes of 5 to 10 basis points on its owner-occupied Home Advantage Variable and Discount Variable products, attributing its decision to “[reaching] the end of [the bank’s] home loan marketing campaign”.

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Effective from 1 May 2019, the new increased rates for Home Advantage Variable loans between $150,000 and $249,999 are:

  • 3.87 per cent for loans with a loan-to-value ratio (LVR) of up to 80 per cent (up from 3.82 per cent)
  • 3.97 per cent for loans with an LVR of between 80 and 90 per cent (up from 3.92 per cent)
  • 4.07 per cent for loans with an LVR between 90 and 95 per cent (up from 4.02 per cent)

The new rates for Home Advantage Variable loans between $250,000 and $699,999 are:

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  • 3.77 per cent for loans with an LVR of up to 80 per cent (up from 3.72 per cent)
  • 3.87 per cent for loans with an LVR of between 80 and 90 per cent (up from 3.82 per cent)
  • 3.97 per cent for loans with an LVR between 90 and 95 per cent (up from 3.92 per cent)

For Home Advantage Variable loans of more than $700,000, the new rates are:

  • 3.77 per cent for loans with an LVR of up to 80 per cent (up from 3.72 per cent)
  • 3.87 per cent for loans with an LVR of between 80 and 90 per cent (up from 3.82 per cent)
  • 3.97 per cent for loans with an LVR between 90 and 95 per cent (up from 3.92 per cent)

For Discount Variable loans of more than $150,000, the new rates are:

  • 3.77 per cent for loans with an LVR of up to 80 per cent (up from 3.67 per cent)
  • 3.87 per cent for loans with an LVR of between 80 and 90 per cent (up from 3.77 per cent)
  • 3.97 per cent for loans with an LVR between 90 and 95 per cent (up from 3.87 per cent)

Bluebay Home Loans has joined the long line of lenders – including Teachers Mutual Bank, ING, NAB, Virgin Money, Heritage Bank, Westpac, Commonwealth Bank, Bendigo Bank, Macquarie Bank, ME, HomeStart Finance and Adelaide Bank – to slash its fixed rates on home loans in recent months.

Effective from 29 April 2019, the new fixed interest rates for owner-occupied loan products are:

  • 3.74 per cent principal and interest (P&I) for two-year and three-year Balanced Bonus Saver mortgages with an LVR of up to 80 per cent
  • 3.74 per cent P&I for two-year and three-year Balanced Home Loan mortgages with an LVR of up to 90 per cent

Meanwhile, Bluebay’s new fixed rates for investment loan products are:

  • 3.94 per cent P&I for two-year and three-year Balanced Bonus Saver mortgages with an LVR of up to 80 per cent
  • 4.14 per cent interest-only for two-year and three-year Balanced Bonus Saver mortgages with an LVR of up to 80 per cent
  • 4.36 per cent variable for Balanced Home Loan mortgages with an LVR of up to 90 per cent

Steve Mickenbecker, finance analyst at financial services comparison website Canstar, said the recent changes to fixed rates have come off the back of easing wholesale funding cost pressures.

“With the significant fall in wholesale funding costs since the start of 2019, lenders have had the opportunity to invest the fattening margin in acquiring new business,” he said.

A long line of lenders had succumb to such cost pressures and hiked their variable mortgage rates throughout 2018 and earlier this year, despite monetary policy inertia from the Reserve Bank of Australia.

However, some analysts – including AMP chief economist Shane Oliver, NAB chief economist of markets Ivan Colhoun, and managing director of Market Economics Stephen Koukoulas – expect the central bank to drop the cash rate in May amid new Australian Bureau of Statistics data reporting flat inflation growth.

[Related: ING hikes commercial rates]

heritagebank

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