Broker News

Five lenders lift rates

Mortgage holders have been slugged with more interest rate rises by five lenders, including Adelaide Bank, Bankwest, ME, AMP and Advantedge.

Adelaide Bank has increased new and existing variable rate loans by 0.10%. In addition, it has increased three-year fixed rate loans by 0.26% and decreased one-year fixed loans by 0.05%, effective Thursday 15 December.

“The decision to adjust rates takes into account a wide range of factors, including pressure on funding costs, balancing the interests of borrowers and savers, and maintaining competitive pricing,” Adelaide Bank general manager, Damian Percy, said in a statement.

Bankwest is set to lift its standard variable rate for investors by 0.15% – from 5.67% to 5.82% – effective 16 December.

A statement from the company said: “Bankwest rates are under constant review to balance increased funding costs, increased capital costs and regulatory requirements with the needs of borrowers and depositors, in order to remain competitive and offer innovative products and great service nationwide.”

ME has announced the following variations to its fixed and variable home loan rates: the one-year fixed owner-occupier and investor loans will decrease by 0.10% to 3.89% and 3.99% respectively; the two-year owner-occupier loans will rise by 0.10% to 3.94%, and the three-year fixed owner-occupier and investor loans will lift by 0.15% to 3.99% and 4.09% respectively. These changes are effective 15 December.

In addition, ME announced it will increase its variable home loan reference rates by 0.10% effective 4 January 2017, affecting new and existing investor and owner occupier loans.

According to ME CEO, Jamie McPhee, Australia’s smaller banks are still subject to higher funding costs relative to the majors.

“The major banks get a credit rating upgrade due to their ‘too big to fail’ status in turn giving them access to cheaper funding, while mortgage risk-weights remain distorted with standardised banks having an average mortgage risk-weight of 39% while ‘advanced’ banks enjoy a mortgage risk-weight of 25%,” he says.

“We believe these rate changes strike a fair balance between rising costs and the needs of depositors, borrowers and our industry super fund shareholders and their members.”

AMP Bank will increase variable interest rates on residential investment loans by 0.15%, effective 6 January 2017 for new customers and 9 January 2017 for existing customers.

The lender says its Professional Pack Home Loan variable interest rate for investor loans $250,000 and above will increase from 3.99% to 4.14% per annum.

Finally, Advantedge is set to lift all variable interest rates by 0.10%, effective Tuesday 24 January 2017.

The increase will apply to all of Advantedge’s white label partners.

“This rate change is needed due to the challenging economic environment, increased regulatory requirements, and financial market conditions that we, and all lenders, are facing,” says Brett Halliwell, general manager of Advantedge.

Published on: Friday, December 16, 2016

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