A major Australian bank has announced today a rate hike of 0.35 per cent on interest-only loans.
Effective 30 June, owner-occupier interest-only loans at NAB will jump to 5.77 per cent per annum (p.a.) while residential investor rates will grow to 6.25 per cent p.a.
The standard variable rate on owner-occupier principal and interest loans will drop by 0.08 per cent, to 5.24 per cent p.a.
Investors paying principal and interest will see no change, with rates remaining at 5.80 per cent p.a.
Acknowledging the impact on home loan borrowers paying back interest only loans, NAB chief operating officer, Antony Cahill pointed to the Australian Prudential Regulation Authority’s (APRA) crackdown on interest only lending as a contributing factor.
He added that cuts to the owner-occupier P&I interest rates would help “around 80 per cent” of the bank’s owner-occupier home loan customers.
“The 0.08 per cent per annum decrease will see owner-occupier customers making principal and interest repayments save $14 each month, or $168 each year [based on a new $300,000 loan over a 30-year term], and help them to pay off their home loan sooner.”
The bank said the changes are “unrelated to the federal government’s major bank levy”.
Earlier in the week, Westpac announced similar changes to interest-only loans and also said the rate hikes were “not in response” to the federal government’s levy on banks.
[Related: Westpac hikes rates by 34 points]