19 lenders join the big banks in lifting home loan rates
Over the last few weeks the home loan world sure has had a shake up, with all four of the big banks - NAB, Westpac, ANZ and CommBank - lifting variable rates for Aussie borrowers.
But the majors aren’t alone in hiking up rates, as Mozo’s database shows that over March, 19 other home loan lenders have joined the rate hike party, including the Bank of Melbourne, Citibank and St. George.
<<Update 31 March 2017>> 24 lenders have now increased their rates on top of the big four, with ING Direct and ME the latest banks to do so. See the full list of lenders here.
Overall, the smallest rate increases were applied to owner occupier loans, with an average rate increase of 0.09% for those paying off both the principal and the interest, whereas investors with interest only loans were hit the hardest, with an average rate increase of 0.23%.
These rate hikes come despite the Reserve Bank leaving the official cash rate at 1.50% since August last year - and expectations that it will stay on hold until later in the year, if not early 2018.
What does this mean for borrowers?
According to Mozo’s Data Manager, Peter Marshall this is not the first round of out of cycle rate hikes, and it definitely won’t be the last.
“Even if the RBA doesn’t lift rates until 2018, more out of cycle interest rate hikes are expected to come over the year, as banks point to the rising cost of funding to justify increasing mortgage rates.”
“While there’s not much consumers can do about rising home loan rates, that doesn’t mean the power is completely out of their hands.”
Marshall’s advice to borrowers is to ensure they are on the best possible loan for their circumstances. “Have a look at your rate and compare it to the best in market. When you consider that the lowest variable rate in our database currently sits at a low 3.39%, there are still great deals to be found.”
To compare over 500 home loan packages currently in the market right now, punch your numbers into Mozo’s home loan comparison tool here.