Bendigo and Adelaide Bank said it would increase its residential investment variable interest rate by 0.25% to 6.01% per annum. Standard residential variable mortgage rates for owner-occupiers will remain unchanged at 5.48% per annum.

These changes will be effective as of 31 March for new and existing loans.

A further decision was made to adjust the loan-to-value ratio cap on residential investor loans to 80%, effective 27 March.

Mike Hirst, managing director of Bendigo and Adelaide Bank, said the adjustments were made to meet regulatory requirements concerning restricting investor lending. Additionally, the changes reflect the bank’s view that recent ultra-competitive mortgage pricing needs to return to levels that better reflect current market funding and capital costs.

“As has been well telegraphed to all Australian authorised deposit-taking institutions, there is an expectation that as lenders, we must manage within the regulator’s 10 per cent growth speed limit for investor loans,” he said. “When setting these rates we’ve tried to carefully balance the interests of our mortgage customers, those who earn money through deposits and those who invest in our Bank.”

Other small lenders, such as Teachers Mutual Bank, Unibank, and Firefighters Mutual Bank, are increasing their owner-occupier fixed rates from one to five years by 7 basis points. This applies to interest-only and principal-and-interest loans.