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Rate hikes hit variable home loans

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The proposed out-of-cycle rate hikes for owner-occupied variable home loans by three of Australia’s major banks, as well as ten other lenders, have come into effect.

Eighteen lenders in total have announced out-of-cycle rate increases. All but two lenders—AMP Bank and Citibank—increased both owner-occupied and investor home loan rates. Those two only increased rates for owner-occupied home loans.

Data gathered by finder.com.au suggests that investors are taking more heat from the increases than borrowers.

Indeed, three of the 18 lenders—Adelaide Bank, Bendigo Bank, and CUA—have increased investment variable home loan rates higher than owner-occupied rates.

Although the average increase was relatively the same for both owner-occupied and investment home loans among lenders, at 0.17 percentage points, standard variable rates are higher for investors.

Across lenders, the average standard variable rate for investment loans is at 5.70%, and for owner-occupied loans is at 5.50%.

The higher rates, particularly for investor home loans, are being labelled the result of more stringent APRA regulations to limit investment lending growth.

With significant differences in rates among lenders, borrowers are encouraged to actively search for better deals than their current loan.

The following lenders that have announced variable home loan rate increases since October 2015:
 
Lender Owner-occupied standard variable rate rise New owner-occupied standard variable rate Investment standard variable rate rise New investment standard variable rate Effective date
Adelaide Bank 0.12% 4.26% 0.17% 4.71% November 20, 2015
AMP Banking 0.18% 5.72%     November 20, 2015
ANZ 0.18% 5.56% 0.18% 5.83% November 20, 2015
Bank of Melbourne 0.15% 5.60% 0.15% 5.85% November 20, 2015
Bank of Queensland 0.18% 5.74% 0.18% 6.03% November 20, 2015
Bank SA 0.15% 5.67% 0.15% 5.92% November 20, 2015
Bankwest 0.18% 5.65% 0.18% 5.97% November 17, 2015
Bendigo Bank 0.12% 5.68% 0.15% 5.91% November 20, 2015
Citibank 0.20% 5.94%     October 30, 2015
Commonwealth Bank 0.15% 5.60% 0.15% 5.87% November 20, 2015
CUA 0.13% 5.06% 0.19% 5.42% November 24, 2015
ING DIRECT 0.18% 5.02% 0.18% 5.02% January 15, 2016
Macquarie Bank 0.20% 5.70% 0.20% 5.97% November 20, 2015
ME Bank 0.20% 5.08% 0.20% 5.49% November 20, 2015
NAB 0.17% 5.60% 0.17% 5.60% November 12, 2015
St George Bank 0.15% 5.69% 0.15% 5.69% November 20, 2015
Suncorp Bank 0.16% 5.70% 0.16% 5.97% November 20, 2015
Westpac 0.20% 5.68% 0.20% 5.95% November 20, 2015

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