Banks raise home loan interest rates as APRA, RBA decisions lie ahead

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on October 29, 2021 Fact Checked
Banks raise home loan interest rates as APRA, RBA decisions lie ahead

Following hot on the tails of the big four, UBank, Bank of Queensland, and People's Choice Credit Union have increased fixed mortgage rates.

CommBank, Westpac, NAB and ANZ have all increased fixed mortgage rates, largely consistent with each other, while cutting variable rates.

This is ahead of the RBA's Melbourne Cup cash rate decision on Tuesday, and new APRA serviceability rules coming Monday.

While the RBA is widely expected to hold, major banks have adjusted their forecasts as to when the first cash rate hike will happen - CBA had the earliest tip of November 2022, followed by Westpac at February 2023, and ANZ at the second half of 2023.

This is despite the Reserve Bank board maintaining it does not forecast a rate hike until 2024, even as inflation hits the 3% barrier for two consecutive quarters.

A number of other lenders increased home loan rates on Thursday, namely UBank, Bank of Queensland, and People's Choice Credit Union.

UBank

UBank increased three and five-year fixed home loan rates. Some changes include:

  • Owner Occupier Fixed P&I 3 Years 80%: 24 basis point increase to 2.09% p.a. (2.19% p.a. comparison rate*)
  • Owner Occupier Fixed P&I 5 Years 80%: 10 basis point increase to 2.59% p.a. (2.37% p.a. comparison rate*)
  • Investor Fixed 3 Years P&I 3 Years: 15 basis point increase to 2.24% p.a. (2.34% p.a. comparison rate*)
  • Investor Fixed 5 Years P&I 5 Years: 10 basis point increase to 2.64% p.a. (2.48% p.a. comparison rate*)

Investment home loans have a maximum LVR of 80%.

UBank also increased interest rates on owner occupier home loans for those with 15% deposits (85%) LVR, which waive lenders mortgage insurance.

Bank of Queensland

BoQ also increased owner occupier fixed mortgage rates by 10 basis points, spanning between one and five years. Some changes include: 

  • Fixed 1 Year 80%: Now 2.39% p.a. (3.19% p.a. comparison rate*)
  • Fixed 2 Years 80%: Now 2.09% p.a. (3.08% p.a. comparison rate*)
  • Fixed 3 Years 80%: Now 2.29% p.a. (3.05% p.a. comparison rate*)

Fixed-rate home loans for borrowers with up to 90% LVR were also increased by 10 basis point.

People's Choice

The Adelaide-based credit union did much the same, increasing interest rates on fixed mortgages. Some changes included:

  • Residential Fixed 4 Years P&I: 25 basis point increase to 2.79% p.a. (4.08% p.a. comparison rate*)
  • Investment Fixed 4 Years P&I: 25 basis point increase to 2.99% p.a. (4.57% p.a. comparison rate*)

A number of other investor and owner occupier loans fixed for between four and five years were also increased by five and 25 basis points.

People's Choice also decreased its standard variable rates for both owner occupiers and investors by 35 basis points. 

Australian Military Bank - a bank only for Defence Force members and family - also slashed its standard variable rate by 159 basis points.


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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
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME 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%
LIMITED TIME 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%
VariableMore details
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
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
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
NO UPFRONT OR ONGOING FEES

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
NO UPFRONT OR ONGOING FEES

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of November 27, 2021. View disclaimer.


Photo by Eunice C on Unsplash

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 click through onto the web site links.

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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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