Beyond Bank slashes fixed home loan rates while others increase

author-avatar By on June 25, 2021
Beyond Bank slashes fixed home loan rates while others increase

Beyond Bank continues to cut fixed home loan rates, with some cut by up to 50 basis points in the past week, while other lenders gradually increase theirs.

Two of Beyond Bank's biggest cuts were applied to interest-only (IO) investment home loans fixed for two to three years:

  • Total Home Loan 2 Years: 50 basis point cut to 2.39% p.a. (4.30% p.a. comparison rate*)
  • Total Home Loan 3 Years: 50 basis point cut to 2.39% p.a. (4.15% p.a. comparison rate*)

The new interest rates apply to borrowers with a maximum loan-to-value ratio (LVR) of 80% and are advertised as a 'special offer', meaning they could be withdrawn at any time.

The equivalent fixed loans paying principal & interest (P&I) were also cut by 20 basis points. 

A series of other investment loans offered by Beyond Bank were also cut by 10 basis points. 

A few more lenders increased home loan rates this week

A series of other, smaller, lenders increased home loan interest rates slightly, after ANZ, Westpac, NAB, and CommBank did so recently.

These lenders include BCU, which raised rates on some five-year fixed loans:

  • Investment Fixed IO 5 Years: 10 basis point rise to 2.89% p.a. (3.69% p.a. comparison rate*)
  • Investment Fixed P&I 5 Years: 10 basis point rise to 2.79% p.a. (3.65% p.a. comparison rate*)
  • Residential Fixed P&I 5 Years: 10 basis point rise to 2.59% p.a. (3.47% p.a. comparison rate*)

Qudos Bank also increased rates on a large swathe of home loans by 10 basis points. Some noteworthy ones include:

  • Owner Occupied P&I 3 Years 90%: Increased to 2.19% p.a. (2.64% p.a. comparison rate*)
  • Investment P&I 3 Years 90%: Increased to 2.59% p.a. (3.08% p.a. comparison rate*)

That said, Qudos Bank also cut rates slightly on a number of owner-occupied and construction loans by between 5 and 10 basis points.

Horizon Bank also increased rates on two home loans by 10 basis points:

  • Owner Occupied Fixed 3 Years: Increased to 2.29% p.a. (3.23% p.a. comparison rate*)
  • Investment Fixed 3 Years: Increased to 2.54% p.a. (3.48% p.a. comparison rate*)

Term Funding Facility in the rear view mirror

There is less than a week to go before the Reserve Bank's Term Funding Facility (TFF) winds down, putting an end to the very cheap bank funding which helped flood the market with cheap home loans.

A few experts said its end will lead to a 'material' rise in home loan rates.

Prudential regulator data also shows that the introduction of the TFF coincides with an increase in 'riskier' loans, particularly when it comes to debt-to-income ratios.

So, what's the wrap on the TFF? 

RBA data released on Monday shows a further $9.3 billion was drawn down from the $200 billion-plus facility in the past week, totalling $147.4 billion since inception.

This means a further $61.6 billion will need to be drawn down by the end of the month.

Tick tock.

When it rains it pours...


Photo by Jason Abdilla on Unsplash

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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