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Westpac raises IO rates by 34 basis points

Tuesday, June 20th, 2017

 

Westpac today announced an eight basis points reduction in variable interest rates for customers paying principal and interest on their owner occupier home loans. This will take the standard variable rate for these owner occupiers to 5.24% p.a.

Westpac has also adjusted interest only rates for variable home loans as follows:

  • Owner occupied interest only rate will increase by 34 basis points to 5.83%p.a.
  • Investor interest only rate will increase by 34 basis points to 6.30%p.a.

These rate changes are all effective from 30 June 2017.

George Frazis, chief executive of Westpac Consumer Bank, said this is good news for owner occupier customers who make principal and interest repayments as they will benefit from lower interest rates allowing them to pay off their loans faster.

“We hope the rate reduction will encourage owner occupier customers with interest only home loans to switch to principal and interest repayments, helping them to pay down their home loan in this low interest rate environment. There will be no switching fee.

“We understand the significance of interest rate changes to our home loan customers, so we try to balance the needs of both owner occupiers and investors in making these decisions.

“APRA’s limit on new interest only lending is 30% of new residential mortgage lending, so we have to continue to make changes to our interest only rates and lending policies to meet this benchmark,” said Mr Frazis.

“Today’s decision is not in response to the Federal Government’s recently announced bank levy,” Mr Frazis added.

 

AUSTRALIAN BROKER 20/6/2017

Author: Lynne Cox

She is a Mortgage Broker and holds an Australian Credit Licence # 365386. She has been involved in the Mortgage Broking Industry since May 1996 but has been involved in small business since 1977. Lynne is a licensed finance broker. She was the President of the Finance Brokers Association of Australia until March 2004 where she is now a Life Member, and she was also a Member of the Finance Brokers Supervisory Board until it disbanded in October 2003.