RateCity reports that Westpac has followed in ANZ’s footsteps by further penalising customers who opt for interest-only repayments while offering a small reward for ideal borrowers.
For owner-occupiers paying principal and interest, this recent change translates to a savings of $17 a month, or $204 a year for the average mortgage holder.
Owner-occupiers paying interest-only will pay an extra $99 a month or $1188 a year, while for investors paying interest-only, the change will add an extra $100 a month, or $1,200 a year on to their repayments.
RateCity Money Editor Sally Tindall said the changes would receive mixed reviews for their customers.
“A drop of 8 basis points for owner occupiers paying down their debt is a small reward for customers who are doing the ‘right’ thing.
“While $17 a month might seem like small change, for some people paying off their home loan, every dollar really does count.
“Meanwhile Westpac has shown it’s prepared to sting its investors hard with a 34 basis point jump for anyone who opts not to pay down their principal.
“Rates above 6 per cent at a time of a record low cash rate of just 1.5 per cent will be a reality check for some investors.
“Today’s rate changes are another move to comply with APRA’s new interest-only requirements, however, it has the added benefit of generating more profit from customers who are willing to cop the higher rates.
“Last week’s ABS housing finance figures suggest some new investors are getting cold feet as a result of APRA’s intervention. The big question will be whether this cooling will last,” she said.
WESTPAC STANDARD VARIABLE RATE (SVR) CHANGES
| Old rate | New rate | Change | Old monthly repayments | New monthly repayments | Change | |
|---|---|---|---|---|---|---|
| Owner-occupier P&I | 5.32% | 5.24% | -0.08% | $1,948 | $1,931 | $17 |
| Owner-occupier IO | 5.49% | 5.83% | 0.34% | $1,601 | $1,700 | -$99 |
| Investor P&I | 5.79% | 5.79% | N/A | $2,051 | $2,051 | $0 |
| Investor IO | 5.96% | 6.30% | 0.34% | $1,738 | $1,838 | -$100 |
BIG4 – CURRENT SVR RATE LIST
| Owner-occupier P&I | Owner-occupier IO | Investor P&I | Investor IO | |
|---|---|---|---|---|
| ANZ | 5.20% | 5.75% | 5.80% | 6.26% |
| CBA | 5.25% | 5.47% | 5.80% | 5.94% |
| NAB | 5.32% | 5.42% | 5.80% | 5.90% |
| Westpac | 5.24% | 5.83% | 5.79% | 6.30% |
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