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Major bank lifts fixed interest rates

A big four bank has announced that it has raised fixed interest rates on investor and interest-only home loans in a bid to meet its regulatory requirements.

Commonwealth Bank has announced that, effective immediately, fixed rates on interest-only loans for owner-occupiers will rise by 25 basis points.

Fixed rates for owner-occupier customers making principal and interest repayments have not changed.

For investors, interest-only loans will rise by between 25 and 50 basis points (depending on term) while investor principal and interest mortgages will rise by 25 basis points.

The bank said: "Commonwealth Bank is increasing home loan fixed interest rates for investment home loans and interest-only customers to ensure we continue to meet our regulatory requirements.

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"Home loan customers who already have a fixed rate loan are unaffected by these changes. We continue to offer competitive rates across our products, including the equal lowest owner-occupier standard variable rate among the major banks. 

"We encourage home buyers to speak with one of our home loan specialists so we can provide them with a solution that is best for their circumstances." 

The moves come following new speed limits from APRA and industry surveillance by ASIC into whether lenders and mortgage brokers are “inappropriately recommending more expensive interest-only loans”.

New rates can be found below: 

Fixed Rate Interest-Only Owner-Occupier Home Loans

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Product

Change (p.a)

New rate (p.a)

1 year fixed rate

0.25%

4.64%

2 year fixed rate

0.25%

4.24%

3 year fixed rate

0.25%

4.34%

4 year fixed rate

0.25%

4.64%

5 year fixed rate

0.25%

4.84%

     

Fixed Rate Principal and Interest Investment Home Loans

Product

Change (p.a)

New rate (p.a)

2 year fixed rate

0.25%

4.44%

3 year fixed rate

0.25%

4.54%

4 year fixed rate

0.25%

4.84%

5 year fixed rate

0.25%

5.04%

     

Fixed Rate Interest-Only Investment Home Loans

Product

Change (p.a)

New rate (p.a)

1 year fixed rate

0.25%

4.84%

2 year fixed rate

0.50%

4.69%

3 year fixed rate

0.50%

4.79%

4 year fixed rate

0.50%

5.09%

5 year fixed rate

0.50%

5.29%

[Related: Interest-only mortgage glut sparks default risk]

Major bank lifts fixed interest rates
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Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

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