Commonwealth Bank increases interest rates for home owners and investors

Commonwealth Bank increases interest rates for home owners and investors
Commonwealth Bank increases interest rates for home owners and investors

Interest rates hikes have struck home owners and investors after the Commonwealth Bank (CBA) lifted fixed rate deals on its loans by as much as 0.5 per cent.

Customers taking out fixed rate deals with rate will now be hit with increases across 1, 2, 3, 4 and 5 year fixed terms. It is the second rate hike within 20 days.

However, the bank provided for owner occupiers signing up to principal and interest fixed home loan deals to escape the latest hikes.

The Commonwealth Bank said the move was to ensure it "continue[d] to meet our regulatory requirements".

In a memo issued to mortgages brokers, 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.

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.

CBA raised rates for interest-only loans to 5.94 percent in March.

Homebuyers also faced increased fixed interest rates in December 2016.

The bank’s measures follow an increased crackdown by the banking regulator, the Australian Prudential and Regulation Authority, to limit interest-only loans.

Tags: 
Home Loans Commonwealth Bank

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