Just a day before spring property season kicks off, Suncorp has today announced it will increase variable home loan interest rates by 17 basis points, effective September 14th 2018.
The news comes two days after Westpac became the first big bank to hike variable interest rates across its range of home loan products.
And just like Westpac, Suncorp’s decision has come in response to a sustained increase in wholesale funding costs.
“In March we acknowledged the increase in the Bank Bill Swap Rate (BBSW), which has continued to rise,” said Suncorp Banking & Wealth CEO, David Carter.
He continued that “...While we have been absorbing this increase, the changes announced today are necessary to ensure our ongoing ability to support lending growth for home loan customers.”
How much the rate change will add to your monthly repayments
And as the many households across the nation now wonder how the rate rise will affect their monthly repayments, we thought it might be worth taking our home loan repayment calculator for a spin.
Say you borrowed $300,000 to be repaid over 30 years on Suncorp’s current Standard Variable Home Loan rate of 5.60% (5.76% comparison rate*). If you were paying principal and interest, your monthly repayments would total to $1,722.
Following September 14, this rate will jump to 5.77%, bumping your monthly repayments up to $1,755 - a difference of $33, or an additional $396 a year.
“I think this is only the beginning of the many rate hikes we’ll see over the coming months,” said Mozo Product Data Manager, Peter Marshall.
“What will be interesting to see is how long the rest of the big four hold out following Westpac’s decision to move rates.”
But according to Carter, the rate change may only be a temporary solution should funding costs improve.
“We acknowledge that any increase to rates will impact our home loan customers’ cost of living. We’re committed to reviewing home loan rates, should there be a sustained improvement in funding costs,” he said.
But you don’t have to wait for your lender to hike rates to switch home loans, so head on over to our home loan comparison tool to make the switch today.
*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The
comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.