Mortgage market deep dive: Greater Bank, Newcastle Permanent & MOVE hike rates

Are skyrocketing house prices and unyielding interest rates keeping your homeownership dreams at bay? Chances are, you're not alone.

House prices have continued to soar this year with few signs of easing, while still-high interest rates are seemingly locking a whole cohort of buyers out of the market.

The typical borrower taking out a new home loan from a bank in March was serviceability tested at an interest rate of 9.3% p.a., according to the latest APRA figures.

The financial watchdog demands banks ensure wishful borrowers could still afford their repayments if their interest rate were to rise by 3% p.a.

It's a buffer that's likely locking many out of the market.

A homebuyer looking to sign onto a 30-year, $500,000 home loan with a typical interest rate of 6.3% p.a. will currently need to prove they could repay over $3,875 a month.

That's around $1,250 more than their actual repayments would be.

Meanwhile, lenders apparently have little reason to lower interest rates.

As ANZ noted in its latest housing outlook report, competition between lenders to win borrowers from one another has weakened amid a dip in refinancing activity.

At the same time, it's likely the case that steadfast interest rates have deterred many would-be refinancers from shifting their mortgage.

Indeed, major movements in the home loan rate space have been few and far between in recent times.

And with ANZ taking the step to push back its forecast for the RBA's first rate cut by three months to February, it might be some time before embattled home loan holders feel reprieve.

But that doesn't mean it's not worth keeping an eye on what lenders are doing with their mortgage rates. This week saw hikes from three major mutuals, two of which still have cash back offers on the table.

Greater Bank & Newcastle Permanent shake up rates by as much as 30 basis points

Greater Bank and Newcastle Permanent each made changes to their home loan lineups this week, hiking rates on its discounted packages and special offers.

The mutual banks both sit under the Newcastle Greater Mutual Group umbrella following their 2023 merger.

Greater Bank lifted rates on its discounted variable rate products by 10 basis points this week, with new rates for those making principal and interest repayments including:

Product name	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
Great Rate Discount Variable	≤80%	+10bp	6.19%	6.20%
Ultimate Discount Variable	≤80%	+10bp	6.29%	6.65%

While the Great Rate home loan is largely fee-free, the Ultimate home loan promises an offset account and the option to link a no-annual-fee credit card.

Though, it wasn't all bad news for prospective Greater Bank borrowers.

It dropped some fixed rates by up to 30 basis points, with borrowers considering fixing their rate for one year now potentially able to secure a rate as low as 5.99% p.a.

Meanwhile, Newcastle Permanent hiked some of its home loan rates by up to 20 basis points.

Eye catching changes to variable rates included:

Product name	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
Real Deal P&I Special Offer	≤80%	+10bp	6.19%	6.23%
Real Deal P&I Special Offer	≤95%	+10bp	6.84%	6.88%
Premium Plus Package P&I Special Offer	≤80%	+10bp	6.24%	6.58%
Premium Plus Package P&I Special Offer	80%-95%	+10bp	7.05%	7.38%

Like the two Greater Bank products mentioned above, Newcastle Permanent's Real Deal product promises low fees and limited features, while its Premium Plus Package home loan provides an offset account and other benefits.

Up to $3,000 cash back on the table

Greater Bank and Newcastle Permanent are also among the dwindling number of lenders still offering cash back deals for eligible refinancers.

The latter bank promises up to $2,500 cash back for refinanced loans worth $500,000 or more, or $2,000 cash back for loans worth under $500,000.

Newcastle Permanent goes one better, offering $3,000 to borrowers refinancing a loan worth at least $250,000 via its online channels - but only until 17 June.

See also: Top Home Loan Cashback Offers & Refinance Deals

MOVE Bank lifts interest rates by up to 35 basis points

MOVE Bank also hiked rates on many of its home loan offerings this week, lifting fixed rates by as much as 35 basis points.

No doubt, though, more eyes were on its variable rate products, some of which received a nudge upwards.

Changes to variable rates included:

Product name	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
Everyday Home Loan P&I	80%-90%	+10bp	6.24%	6.29%
Everyday Home Loan P&I	>90%	+10bp	6.39%	6.44%
Offset Home Loan P&I	<80%	+10bp	6.29%	6.34%
Offset Home Loan P&I	80%-90%	+10bp	6.44%	6.49%
Offset Home Loan P&I	>90%	+10bp	6.59%	6.64%

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