Commonwealth Bank hikes fixed rate interest rate deals

HOME loan customers have been hit again by interest rates hikes after the nation’s largest lender lifted fixed rate deals by as much as 0.5 per cent.

HOME loan customers have been hit again by interest rates hikes after the nation’s largest lender lifted fixed rate deals by as much as 0.5 per cent.

The Commonwealth Bank today revealed both owner occupier and investors would be stung when taking out fixed rate deals with rate increases across 1, 2, 3, 4 and 5 year fixed terms.

The only borrower to escape these latest fixed rate hikes is owner occupiers signing up to principal and interest fixed home loan deals.

In a memo issued to mortgages brokers today CBA outlined that interest-only investment loans would be the worst hit — 2, 3, 4, and 5 year terms would all rise by 0.5 per cent.

MORE: Home loan customers hit by higher rates if they can't repay their loan

Borrowers taking out interest-only loans are getting hit by rate hikes.

The changes are effective for new and existing customers who switch into one of these products from today.

Three-year fixed rate interest-only owner occupier loan rates will rise by 0.25 per cent to 4.49 per cent.

Three-year fixed rate interest-only investment loan rates will rise by 0.5 per cent to 4.94 per cent.

Three-year principal and interest investment loan rates will rise by 0.25 per cent 4.69 per cent.

The Commonwealth Bank has increased some fixed rate deals by as much as 0.5 per cent.

The measures follow an increased crackdown by the banking regulator, the Australian Prudential and Regulation Authority, to limit interest-only loans and also the growth to investment lending.

Calculations from financial comparison website RateCity has found on a three-year fixed interest-only investor deal for a $300,000 30-year loan, a jump by 0.5 per cent to 4.94 per cent will increase monthly repayments by $125.

This will take repayments to $1235 per month.

UBank, a subsidiary of National Australia Bank has also announced it is hiking investor variable and fixed rate deals with increases ranging from between 0.17 and 0.21 per cent.

For an investor with a principal and interest loan the standard variable rate has risen from 0.2 per cent to 4.66 per cent.

Three-year fixed rates for investors paying principal and interest have risen by 0.17 per cent to 3.99 per cent.

For investors paying interest-only three-year fixed deals have risen by 0.17 per cent to 4.09 per cent.

Smaller lender, Newcastle Permanent who is one of the most competitive in the market, has also increased fixed rate deals for owner occupiers and investors.

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