Lender Virgin Money announces 20 bps home loan rate hikes

Lender Virgin Money announces 20 bps home loan rate hikes
Lender Virgin Money announces 20 bps home loan rate hikes

Home loan lender, Virgin Money has increased variable interest rates for all existing principal and interest (P&I) and interest only (IO) home loans by 20 basis points.

Experts predict this trend will continue in 2019 across many lenders.

The group said the majority of standard variable rates for new home loan applications will remain unchanged, with only a few set to increase.

Lender Virgin Money announces 20 bps home loan rate hikes

Virgin Money has also announced it is reducing fixed rates by between 5bps and 10bps for the following products:

  • Two and three year fixed rates for owner occupier principal and interest loans over $300,000 with an LVR of 90% and under; and
  • Two and three year fixed rates for investment interest only loans with an LVR of 90% and under.

Virgin Money’s general manager, lending, cards & deposits, Johnny Lockwood, said, “We have absorbed higher funding costs for the last twelve months in order to delay the impact for our home loan customers. Unfortunately, funding costs remain high and are likely to remain elevated into the foreseeable future."

The interest rate changes are effective Friday, 11 January 2019.

RateCity.com.au research director Sally Tindall said Virgin Money’s decision to pass these costs onto customers was becoming a trend.

“Virgin was a notable exception in the out-of-cycle rate hikes that happened mid last year.

“As the cost of funding continues to plague Australian lenders, today’s move is likely to be the next step towards a landslide of rate hikes.

“Virgin has still managed to keep their foot in the low rate market by only hiking their lowest rate product by 0.05 per cent for new customers.

“That way they can still offer a rate 3.69 per cent for people looking to bring new business in the door,” she said.

Tags: 
Interest Rates Virgin Money

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