Brisbane-based Suncorp is introducing new pricing methodology for interest-only home lending.
According to David Carter, CEO of banking and wealth, Suncorp previously calculated interest-only rates based on the purpose of the loan, but will now also take into account the type of loan repayment.
“Currently, our interest-only home lending is priced at the same rate as principal-and-interest home lending, however following recent changes in the market we have made changes to our systems to differentiate between borrowers repaying interest-only, and those repaying principal-and-interest,” Carter told Australian Broker. “This change is important as it will ensure the bank can maintain its position relative to regulatory requirements.
“With the market having effectively repriced interest-only lending, and with some lenders having opted out of certain aspects of the market, it’s important for us to also support the focus on this type of lending.”
Carter said the bank would be writing to customers this week to advise them of the change as well as the new interest-only rates, which will take effect on November 1.
“As recently announced, we have launched a number of special offers, as well as reductions to some of our fixed rates, giving customers greater choice if they [want] to move to a principal-and-interest product, and customers asking to switch will not be charged a fee for doing so,” he said.
Effective November 1, Variable interest rates on existing owner-occupier interest-only rates will increase by 0.10% per annum, and variable interest rates on all investor interest-only rates will increase by 0.38%.