Which home loan lenders have raised interest rates?

Tuesday 03 November 2015

Article by Rebeccah Elley

You might have assumed you were safe against a home loan rate rise until the Reserve Bank of Australia lifts rates, but times are changing with APRA requiring major home loan lenders to increase their capital by July 1 next year.

And where will they find this extra capital? Your hip pocket, of course.

Westpac was the first bank to lift its variable rates last month. And as expected the other majors - CommBank, ANZ and NAB - followed suit lifting their rates for both investors and owner occupiers.

Since the major banks announced last month they will increase their variable rates, more rate hikes have followed from Australia's other lenders including St.George, Macquarie Bank, Bendigo Bank, Adelaide Bank, AMP, Bankwest, Big Sky, Citibank, ME, Suncorp, CUA and Bank of Queensland. 

<<Update>> ING Direct has announced it will increase interest rates by 18 basis points.

So how much will these rate rises cost you? Scan the tables below which use three mortgage scenarios - $300k, $500k and $750k - to see the dollar difference each month and over a 25 year period.

Scenario 1 - $300,000 home loan over 25 years

Current standard variable rate Current monthly repayments New standard variable rate New monthly repayments Monthly difference 25 year difference
Westpac 5.48% $1,839 5.68% $1,875 $36 $10,791
CBA 5.40% $1,824 5.60% $1,860 $36 $10,749
ANZ 5.38% $1,821 5.56% $1,853 $32 $9,660
NAB 5.43% $1,830 5.60% $1,860 $30 $9,143
St.George 5.54% $1,849 5.69% $1,876 $27 $8,106
Macquarie 5.50% $1,842 5.70% $1,878 $36 $10,801
Bendigo Bank 5.56% $1,853 5.68% $1,875 $22 $6,487

Scenario 2 - $500,000 home loan over 25 years

Current standard variable rate Current monthly repayments New standard variable rate New monthly repayments Monthly difference 25 year difference
Westpac 5.48% $3,064 5.68% $3,124 $60 $17,984
CBA 5.40% $3,041 5.60% $3,100 $59 $17,916
ANZ 5.38% $3,035 5.56% $3,088 $53 $16,101
NAB 5.43% $3,050 5.60% $3,100 $50 $15,240
St.George 5.54% $3,082 5.69% $3,127 $45 $13,511
Macquarie 5.50% $3,070 5.70% $3,130 $60 $18,002
Bendigo Bank 5.56% $3,088 5.68% $3,124 $36 $10,811

Scenario 3 - $750,000 home loan over 25 years

Current standard variable rate Current monthly repayments New standard variable rate New monthly repayments Monthly difference 25 year difference
Westpac 5.48% $4,597 5.68% $4,687 $90 $26,976
CBA 5.40% $4,561 5.60% $4,651 $90 $26,874
ANZ 5.38% $4,552 5.56% $4,633 $81 $24,152
NAB 5.43% $4,574 5.60% $4,651 $77 $22,859
St.George 5.54% $4,624 5.69% $4,691 $67 $20,266
Macquarie 5.50% $4,606 5.70% $4,696 $90 $27,002
Bendigo Bank 5.56% $4,633 5.68% $4,687 $54 $16,216

How to beat the big bank rate rise

There is one action which could save you a bundle in cash each month and a small fortune over the life of the home loan - refinancing.

Scenario time: Say are signed up with Westpac and your home loan’s rate is set to increase by 20 basis points to 5.68%, by switching to UBank’s UHomeLoan - Spring Offer (Owner Occupier, Principal & Interest) with a 3.99% interest rate (on a $500,000 home loan over 25 years) you would save $488 each month and $146,398 over the life of the loan.

Of course, that’s just one example of the potential savings that could be made. Use our Switch & Save Calculator to see the lowest rate home loans in our database based on your situation.

For more info on switching home loan providers, read our step by step refinancing guide here.

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