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Lender lifts fixed mortgage rates

by Reporter3 minute read

A non-major lender has announced fixed-rate increases across both its owner-occupied and investment home loans.

Newcastle Permanent has increased fixed rates by 10 bps on its Premium Plus Package, effective from Wednesday, 10 June.

The changes apply to owner-occupiers and investors, with both principal and interest (P&I) and interest-only (IO) terms.

Owner-occupier fixed rates now start from 2.39 per cent for P&I borrowers and 2.89 per cent for IO borrowers.

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Fixed rates for investors now start from 2.99 per cent for borrowers with both P&I and IO terms.

Newcastle Permanent is the latest lender to hike fixed rates, after ANZ and Teachers Mutual Bank Ltd (TMBL) lifted rates in May.

Both ANZ and TMBL’s changes followed spikes in the banks’ home lending volumes, with TMBL reporting a 300 per cent increase in monthly applications.

ANZ had also previously attributed a blowout in turnaround times to “record daily volumes”.

Meanwhile, heightened competition for high-quality owner-occupied borrowers continues to trigger reductions in variable mortgage rates, particularly off the back of five 25 bps reductions to the official cash rate over the past 12 months.

According to the Australian Prudential Regulation Authority’s latest property exposure statistics, mortgage rates have dropped from a weighted average of 4.2 per cent in the March quarter of 2019 to a weighted average of 3.1 per cent.

[Related: Major bank hikes fixed rates amid turnaround time debacle]

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