Lender hikes home loan rates

Teachers Mutual Bank Ltd (TMBL) has hiked fixed rates by 15 bps across all owner-occupied products with interest-only (IO) terms and investment products with both principal and interest (P&I) and IO terms.

TMBL’s owner-occupied P&I product remains unchanged at 2.19 per cent.

The changes are effective for applications submitted from Friday, 7 August, and will apply across all TMBL brands, which include Teachers Mutual Bank, Firefighters Mutual Bank, Health Professionals Bank and UniBank.

A TMBL spokesperson told The Adviser that as a “gesture of good will” to its broker parts and members, it has agreed to honour existing rate on applications submitted by 6 August 2020 and settled within 90 days.

“This decision has been made in line with member’s best interests during uncertain times,” the spokesperson added.

“Future rate changes will not necessarily be afforded with the same treatment, and we would encourage future applications to apply for rate lock, so your clients can lock in the rate on application for 90 days.”

This latest hike follows a 5 bps increase to fixed home loan rates in May in a bid to manage a 300 per cent spike in home loan volumes.  

TMBL has also made a number of changes to credit policies in recent months to credit quality concerns off the back of the COVID-19 crisis.

Most recently, TMBL ceased lending to Australian expats and lowered its debt-to-income ratio – calculated with the applicant’s total financial debt commitments divided by their total gross income – from a maximum of 8 to a maximum of 7.

[Related: Melbourne recovery to ‘stifle’ short-lived lending recovery]