Citi and other challenger banks hike fixed home loan interest rates
Compared to other weeks, this past week has been relatively subdued when it comes to fixed home loan rate rises.
The big four banks have taken the week off as events in Ukraine unfold further, the US Federal Reserve hikes its own cash rate, and petrol prices surpass $2.00 per litre.
Citi increased a number of fixed home loan rates this morning, including these ones:
- Mortgage Plus Investment Standard Fixed 2 Years: 15 basis point increase to 3.54% p.a. (3.19% p.a. comparison rate*)
- Mortgage Plus Investment Standard Fixed 5 Years: 20 basis point increase to 4.49% p.a. (3.78% p.a. comparison rate*)
- Mortgage Plus Standard Fixed 2 Years: 15 basis point increase to 3.24% p.a. (2.86% p.a. comparison rate*)
- Mortgage Plus Standard Fixed P&I 5 Years: 20 basis point increase to 4.19% p.a. (3.45% p.a. comparison rate*)
These home loans are for a maximum 80% loan-to-value ratio (LVR), borrowing $350,000 or more.
NAB's acquisition of Citi's retail banking operations is expected to be formally approved by the ACCC later this month.
At a time when variable rates are largely heading downwards (chart below), AMP this week decided to increase rates slightly on some variable home loans.
- Owner Occupied Professional Package 90%: Up 10 basis points to 2.54% p.a. (2.57% p.a. comparison rate*)
- Investment Professional Package 90%: Up 10 basis points to 2.77% p.a. (2.80% p.a. comparison rate*)
These home loans are paying principal & interest for borrowings up to $500,000.
One of Australia's largest mutual bank, People's Choice Credit Union, also increased rates on a number of fixed home loans.
Noteworthy increases included:
- Residential Fixed P&I 2 Years: 15 basis point increase to 3.09% p.a. (4.40% p.a. comparison rate*)
- Residential Fixed P&I 5 Years: 20 basis point increase to 4.39% p.a. (4.61% p.a. comparison rate*)
These home loans are for borrowers with up to 95% LVR.
Other customer-owned banks to increase home loan rates in the past week include Unity Bank, Beyond Bank, Community First Credit Union, which increased by up to 35 basis points.
This comes after the proposed merger of Newcastle Permanent and Greater Bank got the tick of approval from the respective board members.
The merger would make the joined outfit one of the largest customer owned institutions in Australia, and now it's time for members to vote.
"Combined, Greater Bank and Newcastle Permanent have $19.8 billion in total assets and a customer base of approximately 600,000," said Jeff Eather, Newcastle Permanent's chair.
"That puts us in an incredible position to be a real challenger and remain a significant competitor in the banking sector."
Over the past 10 years the number of mutual banks has reportedly halved, with fewer than 70 existing today.
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
