Heritage Bank hikes investor fixed rates; UBank slashes variable rates

By Gerv Tacadena

Heritage Bank hikes investor fixed rates; UBank slashes variable rates

News about the Australian Prudential Regulation Authority’s move that increases the interest rate buffer for mortgage applications put a spotlight on how serviceability rules could impact borrowers with higher interest rates.

Here are some of the lenders that made changes to their mortgage offerings over the past week:

UBank

UBank has lowered its variable rate for owner-occupiers paying principal and interest (P&I) by 15 basis points (bps) under its UHomeLoan product.

New variable rates will apply for loan applications with 80% and 85% LVRs. UBank waives Lenders Mortgage Insurance (LMI) for borrowers taking out an 85% LVR loan

Here are the new rates:

  • UHomeLoan variable rate 80% LVR - 2.19% p.a. (2.19% p.a. comparison rate)
  • UHomeLoan variable rate 85% LVR - 2.34% p.a. (2.34% p.a. comparison rate)

This change followed its move in August to lower its variable interest rate for new investors.

Heritage Bank

Customer-owned Heritage Bank increased its fixed investment rates under the standard and Home Advantage home loan products by 10 basis points.

  • Investment Fixed P&I 1 Year - 2.49% p.a. (4.94% p.a. comparison rate)
  • Investment Fixed IO 1 Year - 2.59% p.a. (4.96% p.a. comparison rate)
  • Investment Fixed P&I 2 Years - 2.49% p.a. (4.72% p.a. comparison rate)
  • Investment Fixed IO 2 Years - 2.59% p.a. (4.76% p.a. comparison rate)
  • Investment Fixed P&I 3 Years - 2.59% p.a. (4.54% p.a. comparison rate)
  • Investment Fixed IO 3 Years - 2.69% p.a. (4.59% p.a. comparison rate)
  • Investment Fixed P&I 5 Years - 3.09% p.a. (4.39% p.a. comparison rate)
  • Investment Fixed IO 5 Years - 3.29% p.a. (4.49% p.a. comparison rate)
  • Home Advantage Investment Fixed P&I 1 Year 150k+ - 2.49% p.a. (3.30% p.a. comparison rate)
  • Home Advantage Investment Fixed IO 1 Year 150k+ - 2.59% p.a. (3.44% p.a. comparison rate)
  • Home Advantage Investment Fixed P&I 2 Years 150k+ - 2.49% p.a. (3.26% p.a. comparison rate)
  • Home Advantage Investment Fixed IO 2 Years 150k+ - 2.59% p.a. (3.40% p.a. comparison rate)
  • Home Advantage Investment Fixed P&I 3 Years 150k+ - 2.59% p.a. (3.25% p.a. comparison rate)
  • Home Advantage Investment Fixed IO 3 Years 150k+ - 2.69% p.a. (3.38% p.a. comparison rate)
  • Home Advantage Investment Fixed P&I 5 Years 150k+ - 3.09% p.a. (3.39% p.a. comparison rate)
  • Home Advantage Investment Fixed IO 5 Years 150k+ - 3.29% p.a. (3.54% p.a. comparison rate)

Bank Australia

Customer-owned Bank Australia has made cuts to a range of its variable mortgage offerings under the Basic and Premium products.

Owner-occupier loans had their rates slashed by 20bps, except for LVR tiers of <90%. On the other hand, the lender has reduced investor rates by 10bps.

Here are some of the changes:

  • Basic Home Loan <80% LVR - down 20bps to 2.5% p.a. (2.34% p.a. comparison rate)
  • Basic Home Loan <90% LVR - down 10bps to 2.8% p.a. (2.84% p.a. comparison rate)
  • Premium Package <80% LVR - down 20bps to 2.5% (2.89% p.a. comparison rate)
  • Premium Package <90% LVR - down 10bps to 2.8% (3.19% p.a. comparison rate)
  • Basic Investment Loan P&I <80% LVR - down 10bps to 2.8% (2.84% p.a. comparison rate)
  • Basic Investment Loan IO <80% LVR - down 10bps to 3% (2.91% p.a. comparison rate)
  • Investment Premium Package P&I <80% LVR - down 10bps to 2.8% (3.19% p.a. comparison rate)
  • Investment Premium Package IO <80% LVR - down 10bps to 3% (3.22% p.a. comparison rate)

Illawara Credit Union

New South Wales-based Illawara Credit Union made substantial changes to its owner-occupier, interest-only rates under its The Works Package product.

  • The Works Package Home Loan Fixed IO 1 Year - down 29bps to 2.5% (3.22% p.a. comparison rate)
  • The Works Package Home Loan Variable IO - down 75bps to 2.5% (3.01% p.a. comparison rate)

Photo by Louis Hansel on Unsplash.

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