Lenders calibrate rates ahead of RBA’s hold decision

By Gerv Tacadena

Several lenders continue to increase fixed rates.

The Reserve Bank of Australia has left the cash rate untouched at 0.1%.

The central bank maintains that it doesn’t see any possibility for a rate increase until inflationary and unemployment targets are met, which, in its current forecast, will be at around 2023.

Previously, the RBA set its eyes to increase the cash rate by 2024.

However, major banks are manifesting a much earlier hike, with CommBank projecting the first rate increase by November 2022.

Wealthi co-founder Peter Esho said inflationary pressures would likely impact the decision of the RBA in the next few months.

“The RBA governor will spend the next few months articulating the new case towards opening the door and reassessing options,” he said.

“We think the euphoria in the residential real estate market will start to moderate and bring with it a much-needed reality check.”

“Short term real estate gains are good vanity metrics for investors, but the long-term investment environment is more important to maintain.”

Meanwhile, several lenders have made some changes their home loan rates in the lead up to the RBA’s decision.

Bank of Queensland

Bank of Queensland increased its discounted residential fixed rates by 10bps.

The rate increase applies across all fixed-rate terms.

  • Residential Fixed 1 yr Discount Rate <80% - 2.39% p.a. (3.19% p.a. comparison rate)
  • Residential Fixed 2 yrs Discount Rate <80% - 2.09% p.a. ( 3.08%% p.a. comparison rate)
  • Residential Fixed 3 yrs Discount Rate <80% - 2.29% p.a. ( 3.05%% p.a. comparison rate)
  • Residential Fixed 4 yrs Discount Rate <80% - 2.69% p.a. ( 3.12%% p.a. comparison rate)
  • Residential Fixed 5 yrs Discount Rate <80% - 2.79% p.a. ( 3.14%% p.a. comparison rate)

Loans with LVRs of up to 90% will also have a higher fixed rate.

People's Choice

Member-owned People's Choice adjusted both its fixed and variable rates for both residential and investment home loans.

Here are some of the notable changes:

  • Residential Fixed P&I 4 yrs - up by 25bps to 2.79% p.a. (4.08% p.a. comparison rate)
  • Home Loan Package Owner Occupied Fixed P&I 5 yrs ≤80% - up by 5bps to 2.89% p.a. (3.09% p.a. comparison rate)
  • Investment Fixed P&I 4 yrs - up by 25bps to 2.99% p.a. (4.57% p.a. comparison rate)
  • Home Loan Package Investment Fixed P&I 5 yrs ≤80% - up by 5bps to 3.19% p.a. (3.38% p.a. comparison rate)
  • Home Loan Package Standard Variable P&I ≤80% - down by 35bps to 2.49% (2.94% p.a. comparison rate)
  • Home Loan Package Investment Standard Variable P&I ≤80% - down by 35bps to 2.79% (3.23% p.a. comparison rate)

UBank

Online lender UBank made some changes in the rates of its investor loan products.

It slashed the variable rate under its UHomeLoan P&I Discount Offer by 21bps to 2.34% p.a. (2.34% p.a. comparison rate).

Meanwhile, the bank increased its investor fixed rates:

  • Inv UHomeLoan Fixed IO 3 yrs - up by 15bps to 2.39% p.a. (2.39% p.a. comparison rate)
  • Inv UHomeLoan Fixed P&I 3 yrs - up by 15bps to 2.24% p.a. (2.34% p.a. comparison rate)
  • Inv UHomeLoan Fixed IO 5 yrs - up by 15bps to 2.79% p.a. (2.54% p.a. comparison rate)
  • Inv UHomeLoan Fixed P&I 5 yrs - up by 10bps to 2.64% p.a. (2.48% p.a. comparison rate)

UBank also hiked its fixed rates for owner-occupiers. Here are some of the changes:

  • UHomeLoan Fixed P&I 3 yrs - up by 24bps to 2.09% p.a. (2.19% p.a. comparison rate)
  • UHomeLoan Fixed PI 3 yrs 80-85% - up by 24bps to 2.29% p.a. (2.35% p.a. comparison rate)
  • UHomeLoan Fixed IO 3 yrs 80-85% - up by 25bps to 2.54% p.a. (2.41% p.a. comparison rate)

Homestar Finance

Non-bank Homestar Finance followed the trend of lowering one-year fixed rates while boosting long-term rates.

Its biggest change was the 70bps hike in its 2-Year Star Fixed P&I product for owner-occupier, which now has a rate of 2.49% p.a. (2.19% p.a. comparison rate)

Here are some of other changes Homestar Finance made across its owner-occupier and investor products:

  • Investment Star Fixed P&I Fixed 1 yr 80% - down 10bps to 2.49% p.a. (2.34% p.a. comparison rate)
  • Investment Star Fixed P&I Fixed 3 yrs 80% - up 30bps to 2.89% p.a. (2.47% p.a. comparison rate)
  • Star Fixed P&I 1 yr 80% - down 10bps to 2.29% p.a. (2.14% p.a. comparison rate)
  • Star Fixed P&I 3 yrs 80% - up 30bps to 2.69% p.a. (2.27% p.a. comparison rate)

Australian Military Bank

Member-owned Australian Military Bank made one of the industry's biggest changes to variable rates over the past months.

The bank slashed its standard variable rate by 159bps to 3.09% (3.13% p.a. comparison rate).

MOVE Bank

MOVE Bank introduced a 10bps increase to its Lockit Fixed 3 yrs Special Offer, which now bears a rate of 1.99% p.a. (3.24% p.a. comparison rate)

Aussie

Aussie made some cuts of up to 20bps across its variable and fixed loans.

Here are some significant changes:

  • Elevate Variable P&I 80% - down by 20bps to 1.99% p.a. (2.03% p.a. comparison rate)
  • Elevate Fixed 1 yr P&I - down by 10bps to 1.89% p.a. (2.65% p.a. comparison rate)
  • Edge Variable P&I Special Offer - down by 20bps to 1.99% p.a. (2.02% p.a. comparison rate)
  • Edge P&I Fixed 1 yr Special Offer - down by 10bps to 1.89% p.a. (2.64% p.a. comparison rate)

The changes also apply to products with an offset account feature.

AMP Bank

AMP Bank decreased the owner-occupier variable rates under its Professional Package by up to 10bps.

The bank recently made up to 40bps cut to its investment variable rates under the same product line.

  • Professional Package Owner Occupied P&I ≤60% 100-499k - down by 10bps to 2.19% p.a. (2.61% p.a. comparison rate)
  • Professional Package Owner Occupied P&I 60-80% 100-499k - down by 10bps to 2.24% p.a. (2.66% p.a. comparison rate)
  • Professional Package Owner Occupied P&I 80-90% 100-499k - down by 10bps to 2.54% p.a. (2.95% p.a. comparison rate)

Suncorp Bank

Suncorp Bank made several changes to its fixed and variable rates for both owner-occupiers and investors.

Here are the biggest changes:

  • Investment Home Package Plus P&I Fixed 5 yrs ≤80% Special Offer - up by 35bps to 2.98% p.a. (3.34% p.a. comparison rate)
  • Investment Home Package Plus P&I Fixed 1 yr 80-90% Special Offer - up by 24bps to 2.58% p.a. (3.45% p.a. comparison rate)
  • Home Package Plus P&I Fixed 5 yrs ≤80% Special Offer - up by 29bps to 2.78% p.a. (3.06% p.a. comparison rate)
  • Investment Back to Basics P&I 70-80% Special Offer - down by 31bps to 2.48% p.a. (2.49% p.a. comparison rate)
  • Back to Basics Better Together P&I 70-80% Special Offer - down by 21bps to 2.23% p.a. (2.24% p.a. comparison rate)
  • Back to Basics Better Together P&I ≤70% Special Offer - down by 11bps to 2.18% p.a. (2.19% p.a. comparison rate)

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