Western Pacific Bank, one of the big four banks, and two other banks, are planning to raise interest-only and fixed mortgage rates next Tuesday. Many Australian investors or home buyers will face a higher risk of capital return. Since Aug. 1, next Tuesday, three Australian banks plan to raise mortgage rates again. The move is aimed at property investors and a broad range of overseas buyers, and homeowners will also be implicated.
The three banks that raised interest rates included sub-banks owned by Western Pacific Bank (Westpac Bank): Melbourne Bank of (Bank of Melbourne), South Australia Bank of (BankSA), and St. George`s Bank of (St George).
Australian media said most banks chose to raise interest rates in financial markets despite the fact that Australia`s inflation rate is currently weak and banks` debt costs have fallen and that mortgage rates should normally fall.
Western Pacific Bank, the second-largest lender to supply home loans in Australia, has previously indicated that it will cut high-risk mortgages at the same time to protect existing borrowers from losses caused by too low interest rates. Of course, this is also to comply with the industry`s regulations. WPBC has also raised interest-only lending rates, raised interest rates on self-managed retirement funds, tightened loan conditions and vetting processes to reduce the number of property investors.
For investors, interest rates on two-year investment-based debt products will rise by 31 basic points to 4.39 percent, experts said. Three-year loan products will fall by five base points to 4.44%. Both five-and six-year loan products will fall by 10 basic points to 4.69 percent. By contrast, interest-repayment products (PII) with interest-only loans, (IO), have increased interest rates even more, and have been a big hit for investors.
Interest-only loans with a maturity of one to two years, the (IO) rate will rise by 13 basic points, and interest rates are expected to rise to 4.99 percent. Interest rates on the same type of products over a three-year period will also rise by three basic points to 5.09 percent.
For homeowners, two-year loan products with the same principal and interest rates will rise by 11 basic points, with an annual interest rate expected to reach 4.19 percent. In contrast, interest rates for three-year products of the same type will fall by 10 basic points, and four-and five-year products will fall by 20 basis points at the same time.
For self-housing, fixed interest rates for one-year and five-year interest-only loans, (IO), rose to 4.74 percent and 5.14 percent, respectively. The fixed interest rate for loan products with interest and principal will start at 4.34%.
The good news is: the upcoming loan rate will not cause losses to customers who already have loan products at the bank!
If customers who have already done business at the bank confirm that the new interest rate is lower than they had previously set, they can use the new lower loan rate, according to the bank`s statement. Conversely, if the interest rate on existing loan products is lower than the new rate, they also have the right to pay the loan at a previously fixed rate.
In short, customers who have completed the loan process in the bank will not be affected in any way!
Suncorp Bank will also change the bank`s lending rate in the context of the bank`s joint adjustment.
Current or new bank customers will be affected. For a period of July 28, this Friday, Suncorp Bank will adjust interest rates on all fixed-rate investment loans within the bank. New bank customers who have yet to complete the loan process and who are about to lend will need to process the product at the new interest rate.
Similarly, customers who have completed loans in the bank will not be affected by this change.
It is understood that the base interest rate for one-year Home Pack Plus lending products within the Sunsorp Bank will increase by 18 basic points, and that the three-year and five-year products of the same type will increase by 30 basis points. A bank spokesman for Suncorp said: The move is intended to comply with the relevant cap on investment loans and interest-only loans within the relevant regulatory bodies.
So what impact will the rise in mortgage interest rates have on buyers and investors?
The rise in mortgage interest rates affects the monthly cost of home buyers. For investors who want to borrow money to buy homes, the rise in mortgage interest rates still has a greater impact on homes with higher total home payments. But it remains unclear whether home prices will be adjusted as a result, making it harder for local or international buyers to buy a home in Australia.
Of course, for banks, raising mortgage rates could raise the cost of money and keep banks` capital ratios at a safer level. So, living in Australia. It seems to be getting harder and harder.
At the beginning of this month, the Australian dollar broke through 0.78 against the US dollar. After that, in mid-July, the Australian dollar jumped 1.5%, and the Australian dollar`s exchange rate against the renminbi was also "soaring" all the way. Many overseas people who want to buy their own homes or invest in Australia are worried.
Moreover, this year`s new state tax policy increases the tax on foreigners` home purchases from 4% to 8%, bringing the tax required by foreign buyers to as much as 13%. Now, banks are raising interest rates on home loans, with Australia`s tight home-buying policies deliberately tightening the Australian housing market and, of course, making it "difficult" for those who want to buy in Australia. However, Australia`s economy is still in a period of recovery, so that the housing market, reduce the trading space of overseas home buyers, people can not help but ask: does the Australian economy want to recover?
