Has your home loan lender moved your interest rate?
UNSUSPECTING borrowers could be hit by a home loan interest rate hike, even though the Reserve Bank has again kept the cash rate on hold. See the full list of companies who have jacked up rates.
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UNSUSPECTING borrowers could be hit by a home loan interest rate hike without even realising it.
The Reserve Bank of Australia kept the cash rate on hold today at 1.5 per cent — where it has sat for two straight years — but this hasn’t stopped variable rates from climbing.
But for lacklustre mortgage customers some banks have increased rates by as much as 12 basis points which adds thousands of dollars to the total loan cost.
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Analysis by financial comparison site Mozo found many lenders have pushed up rates this financial year on owner occupier principal and interest loans.
This includes AMP, Bank of Queensland, Bendigo Bank, Macquarie and HSBC.
Interestingly none of the Big Four banks have hiked rates yet but there’s been mounting speculation that rising costs of funding will inevitably force them to lift rates.
Mozo’s spokeswoman Kirsty Lamont said on a $300,000 30-year home loan the average variable rate is 4.37 per cent.
“This could cause serious pain for many borrowers, particularly those who are already overstretched on their mortgage,’’ she said.
“The banks are putting these rate hikes through pretty quietly, so there’s significant potential for borrowers to be caught out if they don’t pay attention to their home loan statement.”
An increase of just 8 basis points would increase monthly repayments from $1497 to $1511, adding an additional $5100 over the loan term.
Mortgage online bidding service Loan Dolphin’s chief executive officer Ranin Mendis said borrowers should be sniffing out deals well below four per cent.
“Ignoring or being too lazy to switch or negotiate with the existing lender will impact household finances negatively,’’ he said.
“A borrower with a $500,000 loan on a property paying an interest rate of four per cent could save approximately about $28,000 over the life of their loan if they bothered to switch.”
Mr Mendis said it often involves setting aside 30 minutes with your existing bank to score yourself a cheaper deal, often forgoing the need to switch.
“We recently helped a client negotiate a rate down from 4.14 per cent to 3.63 per cent saving about $41,000 over the life of their loan,’’ he said.
“But the trick is to call them annually or every six months.”
WHO HAS MOVED OWNER OCCUPIER VARIABLE RATES?
AMP +0.08 per cent
Arab Bank Australia +0.1 per cent
Aussie +0.06 per cent
Bank of Queensland +0.09 per cent
Bendigo Bank +0.1 per cent
BIDeloan +0.05 per cent
Heritage +0.05 per cent
Homeloans +0.12 per cent
HSBC +0.1 per cent
ING +0.1 per cent
Macquarie +0.06 per cent
Newcastle Permanent +0.08 per cent
PCCU +0.1 per cent
State Custodians +0.04 per cent
Tic: Toc +0.12 per cent
Yellow Brick Road +0.06 per cent
Source: Mozo.com.au. The rate changes apply to principal and interest loans since July 1.
Originally published as Has your home loan lender moved your interest rate?