Ubank lifts mortgage interest rates ahead of RBA March meeting

An Australian bank has hiked its interest rates, as new data reveals the shocking rise in average mortgage payments since the pandemic.

An Australian bank has hiked interest rates for fixed and variable mortgages, days before the RBA convenes for its March meeting.

Mortgage holders were given a brief reprieve over the past month with the RBA putting a pause on increasing the cash rate target at its February meeting.

Despite this, ubank, which is part of National Australia Bank, has delivered increased interest rates to new customers on Thursday, with some loans jumping by 0.1 per cent.

ubank has increased its interest rates this month. Picture: Supplied

Owner occupier variable rate loans have jumped by 0.05 per cent this month, with variable rates on investor loans increasing by 0.1 per cent.

However, the bank is offering some small relief to borrowers wanting to take up a fixed-rate loan, either as an owner occupier or investor.

One-year fixed-rate loans will drop by 0.35 per cent from 7.04 per cent to 6.69 per cent, while a fixed-rate loan over a five-year period will drop by 0.49 per cent to 6.55 per cent.

The new rates apply to any application that is unconditionally approved on or after March 14.

A ubank spokesperson assured its customers these changes do not affect existing loans and there will be no change to their current rates.

The RBA board is scheduled to convene on March 18 and 19 where it is widely expected to keep interest rates on hold at a 12-year high of 4.35 per cent.

Analysis released by economists at Commonwealth Bank, the nation’s largest lender, showed in the 12 months to December, borrowers forked out almost 40 per cent more on their home loans.

The costs of mortgage repayments had climbed a “massive” 162 per cent since their lowest point during the pandemic, the analysis showed.