Australian Military Bank marches rates by up to 55 basis points

author-avatar By on June 26, 2020
Australian Military Bank marches rates by up to 55 basis points

Photo by Troy Mortier on Unsplash

Yesterday, Australian Military Bank raised interest rates on primarily investment home loans by up to 55 basis points.

The biggest rate rises were to the bank's investment 'RateSaver' home loan products, hiked by 55 basis points.

Some examples are below:

  • Variable Investment RateSaver 80% 150k: 55 basis point rise 3.95% p.a. (3.99% p.a. comparison rate*)
  • Fixed Investment 3 Years P&I: 50 basis point rise to 3.59% p.a. (4.86% p.a. comparison rate*)
  • Owner Occupier Construction Loan 80% 150k: 43 basis point rise to 3.95% p.a. (3.99% p.a. comparison rate*)
  • Owner Occupier Fixed 2 Years P&I: 10 basis point rise to 2.79% p.a. (4.38% p.a. comparison rate*)

Overall, it appears up to 80 individual home loan products, with a focus on construction and investment loans, were raised by between four and 55 basis points. 

Although it was initially created to support military families, the bank's products are available to anyone provided they sign up as it's a customer-owned bank.

Bumps in home loan interest rates in recent times aren't new, with ING, Newcastle PermanentME Bank and ANZ all lenders to hike some interest rates in the past two months, but so far in our research, Australian Military Bank's are some of the widest and biggest.

Yesterday, ING also cut some variable home loans by 19 basis points.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayment
 
Budget Home Loan OO P&I
2.68% 2.74% $1,618 More details
2.89% 2.89% $1,663 More details
2.39% 2.40% $1,558 More details
Economy Variable P&I 70%
2.69% 2.86% $1,620 More details

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 08 July 2020. View disclaimer.

Lenders introduce 'special offers'

In the past week, Bank of Queensland, Newcastle Permanent and Freedom Lend cut a suite of home loans as 'special offers' or discounted rates.

Keep in mind discounted rates or promotional rates can end at any time. Details are below.

BOQ

Earlier in the week, Bank of Queensland cut a few investment home loan products by up to 35 basis points, as a 'discount' rate.

The cuts were to fixed investment loans with a maximum LVR of 80%.

  • Investment Fixed P&I 2 Years: 20 basis point cut to 2.69% p.a. (3.74% p.a. comparison rate*)
  • Investment Fixed P&I 3 Years: 15 basis point cut to 2.74% p.a. (3.67% p.a. comparison rate*)
  • Investment Fixed P&I 5 Years: 30 basis point cut to 2.99% p.a. (3.62% p.a. comparison rate*)
  • Investment Fixed IO 2 Years: 25 basis point cut to 2.94% p.a. (3.78% p.a. comparison rate*)
  • Investment Fixed IO 3 Years: 30 basis point cut to 2.99% p.a. (3.73% p.a. comparison rate*)
  • Investment Fixed IO 5 Years: 35 basis point cut to 3.24% p.a. (3.72% p.a. comparison rate*)

Newcastle Permanent

After raising some home loan rates a few weeks ago, Newcastle Permanent cut interest rates on the 'Real Deal' product line as a special offer by up to 22 basis points.

  • Real Deal P&I 80% 150k+: 22 basis point cut to 2.72% p.a. (2.76% p.a. comparison rate*)
  • Real Deal P&I 95%: 12 basis point cut to 3.09% p.a. (3.13% p.a. comparison rate*)
  • Real Deal IO 80% 150k+: 22 basis point cut to 3.12% p.a. (2.90% p.a. comparison rate*)

A couple of home loans for investors were also cut, including:

  • Real Deal Investment P&I 80% 150k+: 10 basis point cut to 3.11% p.a. (3.15% p.a. comparison rate*)
  • Real Deal Investment IO 80% 150k+: 10 basis point cut to 3.11% p.a. (3.14% p.a. comparison rate*)

Freedom Lend

Yesterday, Freedom Lend cut two products by up to 12 basis points as special offers. Details are:

  • Freedom Variable P&I 80%: 10 basis point cut to 2.39% p.a. (2.39% p.a. comparison rate*)
  • Freedom Variable P&I 70%: 12 basis point cut to 2.17% p.a. (2.17% p.a. comparison rate*)

With these cuts, these rates are now some of the lowest we have seen in the variable, owner-occupied market, however borrowers must submit a loan application before 31 July.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
Harrison joined Savings in 2020. He is a journalist with more than four years of experience, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.

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