People’s Choice raises mortgage rates up to 70 basis points


This week has been a busy week for rate moves in the customer-owned banking space, with the People’s Choice Credit Union raising a home loan by 70 basis points.

Credit union of choice increased interest rates on its three-year lump sum fixed interest (IO) mortgage for homeowners by 70 basis points.

The rate has been raised to 2.79% per annum (comparison rate of 3.75% per annum *) for borrowers with a maximum loan-to-value ratio (LVR) of 80%.

The 95% LVR equivalent loan was also increased by 70 basis points to 2.94% pa (3.90% pa comparison rate *).

A number of other People’s Choice home loans have also been increased from 5 to 55 basis points, but some have been reduced as much as 20 basis points.

For example, the two-year fixed lump sum loan for homeowners paying principal and interest (P&I) with a maximum LVR of 80% has been reduced by 20 basis points to 1.89% per annum (comparison rate of 3.10% per year *).

Regional Bank of Australia also increased mortgage rates by up to 25 basis points.

The four-year fixed P&I Premiership Advantage loan for homeowners has been increased to 2.39% per annum (comparison rate 3.19% per annum *).

A wide range of other mortgage loans has also been increased by 10 to 25 basis points.

Auswide Bank increased by 10 basis points a number of mortgage rates.

For example, the “Basic” variable loan for homeowners between 75% and 90% LVR has been increased to 2.59% pa (comparison rate of 2.61% pa *).

Various other Freedom Package loans were also increased by 10 basis points.

It comes as the Reserve Bank’s cheap funding – the Term Finance Facility – ended on June 30.

The Reserve Bank also left its key rate unchanged at 0.10% on Tuesday.

So where do the cuts come from?

Big Bank reduced its 90% P&I “High Rate” variable mortgage loan by 10 basis points, now to 2.49% per year (comparison rate of 2.50% per year *).

Great south shore, formerly CUA, lowered the interest rates of two owner-occupied mortgage loans:

  • 80% shift variable: 10 basis points reduced to 2.54% pa (comparison rate of 2.59% pa *)
  • P&I fixed 2 years: 20 basis points reduced to 1.89% pa (comparison rate of 4.04% pa *)

IMB also cut rates on some mortgage loans, including the P&I one-year paid fixed income loan, which was cut by 40 basis points to 2.59% pa (3.54% pa benchmark rate *).

That said, IMB has also raised the rates on a few home loans by up to 20 basis points, namely the four and five year fixed loans.

Photo by Ivan Solorzano on Unsplash


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