Broker News

Two major banks lift interest rates

Mortgage holders have been slapped with an interest rates rise from two of Australia’s largest banks.

NAB has announced a 0.15% increase on variable rates for new and existing residential investors, effective Monday 12 December 2016.

The variable rate for Residential Investment Home Loans will rise to 5.55% per annum, while the NAB Homeplus Residential Investment Home Loan, available through NAB Broker, will lift to 5.58% per annum.

NAB’s variable rate for owner-occupiers remains unchanged at 5.25% per annum.

According to NAB chief operating officer, Antony Cahill, the change reflects the challenging operating environment.

“Net interest margins are down, particularly in home lending, and remain under pressure,” Cahill said in a statement.

While noting the investor segment “continues to be important to NAB”, Cahill says the low-rate environment poses considerable challenges to all lenders.

“We have to consider a range of factors including the ongoing need to hold longer-term stable sources of funding, continued elevated funding costs, regulatory requirements, and the competitive pressures at play.

In addition, Westpac announced it would lift interest-only variable rates for both investors and owner-occupiers by 0.8%, as well as equity loan rates by 0.15%, effective 16 December.

This will see Westpac’s owner-occupier interest-only variable rate rise to 5.41%, the investor rate to 5.68% and the equity access loan rate to 5.80%.

“Our interest rates are constantly under review, as market and economic conditions change,” Westpac said.

Published on: Tuesday, December 06, 2016

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