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The Big Four Banks Have Now All Made Increases To Home Loan Interest Rates

Homeowners (and aspiring home owners), take note.

Australia's big four banks have now all increased home loan rates, which will see new and existing lenders pay more, after both Commonwealth Bank (CBA) and ANZ announced rate hikes on Friday.

Following the recent rate increases of both Westpac Bank and NAB, Group Executive for Retail Banking Services at CBA, Matt Comyn said the increases come as a result of "rising costs and regulatory responsibilities" and will not come into effect until May 8.

"Rising costs and regulatory responsibilities mean we are increasing home loan interest rates. We have sought to minimise the impact for the majority of our home loan customers who are Australian families trying to pay off their home," he said in a statement released on Friday.

"We encourage customers to switch to principal and interest, where this meets their needs, so that they can continue to enjoy historically low rates."

ANZ also joined CBA in raising rates for lenders, announcing increases to interest-only loans on Friday in a move it says was needed for the bank to "manage our regulatory obligations".

So now that all four of the big banks in Australia have raised home loan rates across the country, here's what you need to know.

CBA have announced four separate rate increases that span across loans for owner-occupiers and investment property owners with both principal and interest-only repayments.

The bank's rates remain as the nation's lowest variable home loan rates by a small margin.

Owner Occupier Loans

  • Principal and Interest-paid loans will increase by 3 basis points to 5.25 percent.
  • Interest-only loans will also increase, up 25 basis points to 5.47 percent.

Investment Home Loans

  • Principal and Interest-paid loans will rise 24 basis points to 5.80 percent.
  • Interest-only loans to increase to 5.94 percent.

ANZ only announced changes to Interest-only home loans in Australia both both new and existing lenders, although current customers with the bank will be notified of the changes that affect them at a later date.

Interest-only, Owner Occupier Loans

  • Rates for new lenders will be increased from 5.25 per cent to 5.45 percent.

Interest-only, Investment Home Loans

  • Investor rates for new lenders will also rise from 5.85 per cent to 5.95 percent.

The bank also named funding costs as the reason for the hikes, which all come into effect from Friday.

Owner Occupier Loans

  • Principal and Interest-paid loans will jump to 5.32 percent.
  • Loans based on Interest-only repayments will also increase to 5.49 percent.

Investment Home Loans

  • Investment property owners will see a rate rise of 0.23 percent on Principal and Interest-paid loans to 5.79 percent.
  • Interest-only loans will increase to 5.96 percent.

NAB was the first of the big four banks in Australia to raise home loan interest rates earlier in March. The hikes, which came without warning and come into effect as of today, saw changes of up to a quarter of a percent as a result of "intense competition, increasing regulation, and elevated funding costs".

The decision to change home loan rates coincided with the United States Federal Reserve's decision to also raise its interest rates for the second time in three months due to economic and jobs growth.

Owner Occupier Loans

  • NAB announced a flat rate change for all owner occupier loans, with interest rates being raised from 5.25 percent to 5.32 percent.

Investment Home Loans

  • In another flat-rate change, rates for residential investment property owners were also increased from 5.55 percent to 5.80 percent.

First Home Buyers

  • In some good news for Australians looking to break into the property market for the first time, NAB announced its lowest-ever interest rate for first home buyers -- a 2-year fixed package rate of 3.69 percent.

Just in case you thought the rate rises were limited to Australia's big four banks, St George Bank also announced late on Friday it would also be increasing its home loan rates. St George will join the big four in introducing several rate hikes, however its interest rate for owner occupiers with principal and interest-paid loans will remain unchanged.

The changes from St George will come into effect from May 8.

Owner Occupier Loans

  • Interest-only home loan interest rates will jump from 5.42 percent to 5.50 percent.

Investment Home Loans

  • Principal and Interest-paid loans for owners of investment properties will rise to 5.78 percent
  • Interest-only loans will also see a rate rise, increasing to 5.98 percent


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