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WESTPAC has followed the lead of the Commonwealth Bank and today increased fixed rate loans deals.
Just three days after CBA announced increases on fixed loan deals with interest-only investment loans getting the biggest hikes, Westpac has just announced their home loan customers will also be hit.
They are hiking fixed interest rate deals across their owner occupier and investment products.
Owner occupiers on interest-only fixed loans will be the worst hit — Westpac is increasing rates by 30 basis points across 1, 2, 3, and 5 year fixed deals.
For a three-year fixed rate loan — among the most popular fixed rate term for borrowers — fixed rates for owner occupier interest-only loans will rise by 30 basis points to 4.56 per cent.
For investors on interest-only deals fixed rates will rises by 10 basis points per cent across 1, 2, 3 and 5 year loan terms.
MORE: CommBank increases interest rates
Investor principal and interest deals will remain unchanged for 1, 3 and 5 year loan terms.
Owner occupiers with principal and interest repayments will also be spared moves on 1, 3, and 5 year deals, while two-year fixed loan rates will drop by 11 basis points to 3.88 per cent.
Westpac’s subsidiary banks, St George and Bank SA are also experiencing moves across many fixed rate deals.
1300homeloans director John Kolenda said in more than 20 years in the mortgage industry he had never seen times like now with continuous changes to rate deals by banks simply wanting to boost their margins.
“I’ve never seen anything like the current market conditions where we have banks moving all over the place and raising rates across different products and totally out of cycle,’’ he said.
A Westpac spokeswoman said these deals which only affect customers who fix their loan from today onwards was “in response to recent regulatory changes.”
Financial comparison site Mozo’s spokeswoman Kirsty Lamont said many lenders are continuing to push up fixed rate deals and putting more pressure on borrowers’ budgets.
“Hot on the heels of the round of out-of-cycle hikes last month we’ve seen 28 lenders in total now up fixed rates since the start of April,’’ she said.
“The fresh round of hikes has hit owner-occupiers and investors paying interest-only loan the hardest as lenders respond to APRA’s recent crackdown on interest-only loans.”
On a $300,000 30-year loan for an owner occupier paying interest only, for a three-year fixed deal their rate new rate of 4.56 per cent will increase monthly repayments by $75 to $1140.
For an investor with the same sized loan paying interest-only their new three-year rate will be 4.56 per cent and their monthly repayments will rise by $25 to $1140.
For owner occupiers and investors paying principal and interest on three-year fixed deals the fixed rates won’t change from 4.09 per cent for owner occupiers and 4.29 per cent for investors.