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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