All panic, no disco: Banks lift fixed home loan rates yet no sign of RBA rate hike

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on March 04, 2022 Fact Checked
All panic, no disco: Banks lift fixed home loan rates yet no sign of RBA rate hike

In a busy week for home loan rate rises, Westpac was the first to jump following RBA's March decision with a number of smaller banks following.

With the events unfolding in Ukraine considered by the RBA to be a "major new source of uncertainty”, the RBA in its March statement outlined it is prepared to be patient in raising the cash rate. 

Banks on the other hand continue to show no sign of reticence in increasing fixed home loan rates, recording another week of hikes by up to 60 basis points across both principal and interest (P&I) and interest-only (IO) loans. 

Westpac was the first of the big-four to react, increasing fixed rates by up to 30 basis points.

This marks the third time this year the major lender has increased fixed home loan rates after hikes in both January and February.

Westpac chief economist Bill Evans said the RBA should not waiver because of uncertainties posed by Russia's invasion of Ukraine.

"Central banks have the responsibility to ensure that high inflationary expectations do not become embedded in the system - risking a wage /price spiral," Mr Evans said.

"Despite the uncertainties of the war this task should not be compromised."

Bank of Queensland

BOQ increased a range of fixed rate home loans for both owner occupiers and investors by up to 35 basis points. Highlights across BOQ's home loan portfolio included:

  • Residential Fixed P&I 3 Years: 25 basis point increase to 4.14% p.a. (3.50% p.a. comparison rate*)
  • Residential Fixed P&I 5 Years: 30 basis point increase to 4.24% p.a. (3.62% p.a. comparison rate*)
  • Investment Fixed IO 3 Years: 35 basis point increase to 4.84% p.a. (3.82% p.a. comparison rate*)
  • Investment Fixed IO 5 Years: 35 basis point increase to 4.84% p.a. (4.05% p.a. comparison rate*)

UBank

NAB owned digital lender UBank, recorded its first rate increase for the year across fixed rate home loans for both owner occupiers and investors. This increase saw loans lift by up to 35 basis points. Highlights across UBank's home loan portfolio included:

  • UHomeLoan Fixed P&I 3 Years: 35 basis point increase to 3.24% p.a. (2.40% p.a. comparison rate*)
  • UHomeLoan Fixed P&I 5 Years: 30 basis point increase to 3.69% p.a. (2.74% p.a. comparison rate*)
  • Investment UHomeLoan Fixed IO 3 Years: 35 basis point increase to 3.54% p.a. (2.66% p.a. comparison rate*)
  • Investment UHomeLoan Fixed IO 5 Years: 30 basis point increase to 3.89% p.a. (2.98% p.a. comparison rate*) 

86 400

NAB owned digital lender in 86 400 increased a range of fixed rate home loans for owner occupiers and investors by up to 35 basis points. Some highlights across 86 400's home loan portfolio included:

  • Own Home Loan Fixed P&I 3 Years ≤80%: 35 basis point increase to 3.24% p.a. (2.70% p.a. comparison rate*)
  • Own Home Loan Fixed P&I 3 Years 80-85%: 35 basis point increase to 3.54% p.a. (3.22% p.a. comparison rate*)
  • Investment Own Home Loan Fixed P&I 3 Years: 35 basis point increase to 3.24% p.a. (2.78% p.a. comparison rate*)
  • Investment Own Home Loan Fixed IO 3 Years: 35 basis point increase to 3.34% p.a. (2.77% p.a. comparison rate*) 

ME Bank

ME Bank increased a range of fixed rate home loans for owner occupiers and investors by up to 45 basis points. Highlights across ME Bank's home loan portfolio included:

  • Member Package Flexible Fixed OO 3 yrs P&I: 20 basis point increase to 3.29% p.a. (2.89% p.a. comparison rate*)
  • Member Package Flexible Fixed OO 5 yrs P&I: 25 basis point increase to 3.74% p.a. (3.23% p.a. comparison rate*)
  • Member Package Flexible Fixed OO 3 yrs IO: 20 basis point increase to 3.89% p.a. (3.04% p.a. comparison rate*)
  • Member Package Flexible Fixed OO 5 yrs IO: 45 basis point increase to 4.34% p.a. (3.48% p.a. comparison rate*)  

Greater Bank

Off the back of a fixed rate hike last week, Greater Bank continued the theme this week increasing a range of home loans for owner occupiers and investors by up to 20 basis points. Some highlights included:

  • Ultimate Fixed 1 Year: 20 basis point increase to 2.19% p.a. (3.76% p.a. comparison rate*)
  • Great Rate Fixed 1 Year: 20 basis point increase to 2.19% p.a. (3.54% p.a. comparison rate*)

At one stage the Great Rate one year fixed loan had an advertised interest rate of 1.59% p.a. - the lowest in the market in Savings.com.au market research.

Teachers Mutual Bank

Teachers Mutual Bank increased a range of fixed and variable rate home loans for owner occupiers and investors by up to 60 basis points. Highlights of fixed rate increases across Teachers Mutual Bank's portfolio included:

  • Your Way Plus P&I Fixed 5 Years 60-80%: 40 basis point increase to 3.89% p.a. (3.32% p.a. comparison rate*)
  • Your Way Plus IO Fixed 5 Years 60-80%: 60 basis point increase to 4.29% p.a. (3.41% p.a. comparison rate*)
  • Your Way P&I Fixed 5 Years: 40 basis point increase to 4.04% p.a. (4.23% p.a. comparison rate*)
  • Your Way IO Fixed 5 Years: 60 basis point increase to 4.44% p.a. (4.39% p.a. comparison rate*)

Highlights of variable rate increases across Teachers Mutual Bank portfolio included:

  • Investment Your Way Home Loan Standard Variable IO: 20 basis point increase to 4.99% p.a. (4.79% p.a. comparison rate*)
  • Your Way Home Loan Standard Variable IO: 20 basis point increase to 4.69% p.a. (4.49% p.a. comparison rate*)

Australian Mutual Bank

Australian Mutual Bank increased a range of fixed rate home loans for owner occupiers and investors by up to 44 basis points. Some highlights included:

  • Residential Fixed 3 Years: 40 basis point increase to 2.88% p.a. (2.76% p.a. comparison rate*)
  • Residential Fixed 5 Years: 44 basis point increase to 3.58% p.a. (3.07% p.a. comparison rate*)
  • Investment Fixed IO 3 Years: 40 basis point increase to 3.33% p.a. (3.29% p.a. comparison rate*)
  • Investment Fixed IO 5 Years: 44 basis point increase to 4.03% p.a. (3.50% p.a. comparison rate*)
  • First Home Buyer Fixed 2 Year Special Offer: 25 basis point increase to 2.38% p.a. (2.63% p.a. comparison rate*)

Further customer-owned institutions in Gateway Bank, Firefighters Mutual Bank, Beyond Bank and UniBank all increased fixed home loan rates across their portfolios by up to 60 basis points. 


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

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWSSPECIAL OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *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. Rates correct as of May 26, 2022. View disclaimer.


Image by Roman Odintsov via Pexels

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

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