More banks hike interest rates

Following in the footsteps of Westpac, ANZ and the Commonwealth Bank, non-major lender ING has announced increases to its home loan rates, with property investors set to pay the price.

As of Tuesday 25 September, interest rates on variable rate investment loans will increase by 0.15 per cent, affecting both existing and new customers. It’s the second rate hike from ING in a matter of months, having increased its owner occupier rates by 0.10 per cent in June.

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Earlier this month, Commonwealth Bank subsidiary Bankwest announced it would also increase its variable home loan interest rates by 0.15 per cent for both investor and owner occupier loans. The new rates will be in place from 4 October, with managing director Rowan Munchenberg citing an increase in wholesale funding costs.

He said, “The cost of borrowing has risen significantly since the start of the year, but so far we have been able to absorb these costs to minimise the impact on our home loan customers.”

As it stands, NAB is the only major lender to have kept its interest rates steady – a decision Prime Minister Scott Morrison welcomed.

He said on Twitter, “Good call by NAB, not to lift mortgage rates; they seem to get it.”

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Where are the opportunities?

According to property research group, RiskWise, there are still opportunities for investors in the changing lending environment.

Commenting on NAB’s decision to keep rates on hold, RiskWise CEO Doron Peleg said the lenders’ mixed messages are creating opportunities for “cashed-up buyers” to make property inroads.

“Savvy investors can take advantage of the situation as the market has cooled and sentiment is not as strong as it was,” Mr Peleg said.

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“Low-risk borrowers can exploit this confusion in the property market especially as sites like RateCity can provide them with the lowest interest rates available.

“Lenders are the market makers and have a major impact but buyers who think about the long term and are in a financial position that enables them to negotiate home loans can definitely benefit from the current climate.”