BOQ, Suncorp, challenger banks increase home loan rates

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on April 08, 2022 Fact Checked
BOQ, Suncorp, challenger banks increase home loan rates

With the RBA widely tipped to raise the cash rate in June, banks have moved ahead of the curve.

In the past week, banks such as Bank of Queensland, ING, and Suncorp increased home loan rates after the RBA's cash rate hold on Tuesday caused a flurry of further speculation.

Westpac is the latest major bank to increase rates, while customer-owned institutions to increase rates in the past week include People's Choice and Newcastle Permanent.

Bank of Queensland

BOQ increased a wide range of fixed home loan rates, with some key increases including:

  • Residential Fixed 1 Year Discount 80%: 75 basis point increase to 3.89% p.a. (3.31% p.a. comparison rate*)
  • Residential Fixed 5 Years Discount 80%: 70 basis point increase to 4.79% p.a. (3.92% p.a. comparison rate*)

Notably, the bank's non-discounted advertised rates for residential one and five-year fixed products are now the same, and the one year fixed interest-only rate is lower than the P&I rate.

Key increases for investors included:

  • Investment Fixed 1 Year Discount 80%: 75 basis point increase to 4.04% p.a. (3.48% p.a. comparison rate*)
  • Investment Fixed 5 Years Discount 80%: 70 basis point increase to 4.94% p.a. (4.09% p.a. comparison rate*)

ING

The spread between one and five year fixed rates appears to be widening, with ING increasing rates by up to 75 basis points:

  • Residential Fixed 1 Year 80%: 45 basis point increase to 3.29% p.a. (2.22% p.a. comparison rate*)
  • Residential Fixed 5 Years 80%: 75 basis point increase to 5.09% p.a. (3.32% p.a. comparison rate*)
  • Investment Fixed 1 Year: 45 basis point increase to 3.49% p.a. (2.75% p.a. comparison rate*)
  • Investment Fixed 5 Years: 75 basis point increase to 5.19% p.a. (3.81% p.a. comparison rate*)

Suncorp

Suncorp increased home loan rates in much the same fashion, with a few key changes including:

  • Residential Fixed 1 Year: 40 basis point increase to 3.59% p.a. (5.03% p.a. comparison rate*)
  • Residential Fixed 5 Years: 45 basis point increase to 4.99% p.a. (5.17% p.a. comparison rate*)
  • Investment Fixed 1 Year: 47 basis point increase to 3.81% p.a. (5.45% p.a. comparison rate*)
  • Investment Fixed 5 Years: 49 basis point increase to 5.13% p.a. (5.47% p.a. comparison rate*)

Suncorp also has interest rate discounts on its packaged products as a special offer.

Customer-owned bank movements

It was much the same story in the customer-owned banking space, with two of the largest - People's Choice and Newcastle Permanent - increasing fixed home loan rates.

People's Choice

  • Residential Fixed 1 Year: 25 basis point increase to 3.19% p.a. (4.54% p.a. comparison rate*)
  • Residential Fixed 5 Years: 30 basis point increase to 4.69% p.a. (4.74% p.a. comparison rate*)
  • Investment Fixed 1 Year: 25 basis point increase to 3.49% p.a. (5.15% p.a. comparison rate*)
  • Investment Fixed 5 Years: 30 basis point increase to 4.99% p.a. (5.24% p.a. comparison rate*)

Newcastle Permanent

  • Residential Fixed 1 Year: 20 basis point increase to 2.99% p.a. (4.17% p.a. comparison rate*)
  • Residential Fixed 5 Years: 30 basis point increase to 4.49% p.a. (4.39% p.a. comparison rate*) 
  • Investment Fixed 1 Year: 10 basis point increase to 3.09% p.a. (4.49% p.a. comparison rate*)
  • Investment Fixed 5 Years: 20 basis point increase to 4.59% p.a. (4.63% p.a. comparison rate*)

Newcastle Permanent is also distinct in the market in that it's one of the very few to offer seven and 10-year-fixed home loans, which it also increased by 30 basis points in the past week.

That said, the lender decreased its variable 'Real Deal' 80% LVR home loan by 10 basis points as a special offer.

Other customer-owned banks to increase rates this week include Gateway Bank and Auswide Bank.


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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.


Photo by Juan Montano 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 visit the web site links at the bottom of this page.

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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 strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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