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Major lender hikes rates out-of-cycle

Yesterday, Westpac became the first big bank to lift interest rates out-of-cycle. Effective 19 September, rates for variable interest rates for owner occupied and residential investment property loans will increase by 0.14%.

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For borrowers, this rise will add an additional $420 a year to the interest bill of an average $400,000, principal and interest loan over a 30 year term.

The Westpac-owned Bank of Melbourne, BankSA, and St George Bank are expected to match the rate hike. It’s anticipated that other Big Four banks will follow suit.

“Switching to a better interest rate can save homeowners thousands of dollars each year. With changes in the market and fluctuating interest rates, it pays to get into the habit of reviewing your home loan from time to time.” says David Hyman, co-founder and managing director of Lendi.

6 Tips to get the most out of your home loan:

  1. For homeowners on interest only loans, if you can afford it, consider switching to principal and interest. You’ll pay less interest over the life of the loan and pay off your loan sooner.
  2. Consider an offset account - it’s a great way to reduce the amount of interest you pay on a home loan. It has the potential to save borrowers tens of thousands of dollars over their loan term.
  3. Consolidate expensive debts - like credit cards, personal and car loans into your home loan. Merging all debt into one repayment can help reduce the amount of interest that needs to be paid.
  4. Get the best of both worlds by splitting your home loan into a fixed and variable rate. This gives borrowers the stability of a fixed rate, while the variable portion offers the flexibility to make extra repayments and pay off your loan faster.
  5. Keep your credit score clean and ensure bills are paid on time. The new Comprehensive Credit Reporting scheme means that paying bills late can blemish your credit history for up to two years.
  6. Compare rates regularly - It can pay to shop around to make sure you're getting the best rate for your individual situation.

You can make sure you've got the most competitive rate in the market by comparing your home loan options, or choose a time to chat with a Home Loan Specialist here.

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Tags: variable interest, standard variable rate, refinance, low interest, big 4 banks

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Important legal stuff

Lendi is the trading name of Lendi Pty Ltd (ACN 611 161 856), a related body corporate of Auscred Services Pty Ltd (ACN 164 638 171, Australian Credit Licence 442372). We will never sell your email address to any third party or send you nasty spam, promise.
# Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
Lendi is a privately owned and operated Australian business. Our mission is to change the way Australians get home loans by providing a faster, smarter and more secure home loan experience designed around the customer’s convenience and needs. Although Lendi compares over 1600 products (2,500+ products including feature and pricing variations) from more than 35 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. While Lendi is 35% owned by founders and employees, we have also been supported by some great minority shareholders including Bailador, Macquarie Bank Ltd and a number of Australian sophisticated investors. Lendi's board is majority independent and non-executive.
WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years. Fees and charges apply. All applications are subject to assessment and lender approval. Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria.
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