Citi and other challenger banks raise fixed interest rates on home loans

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Citi and a number of lenders over the past week have raised fixed mortgage rates, this time by as much as 40 basis points.

Compared to other weeks, the past week has been relatively subdued for fixed mortgage rate hikes.

The big four banks took a week off as events in Ukraine unfold further, the US Federal Reserve hikes its own exchange rate and gasoline prices rise above $2.00 a liter.

Citi raised a number of fixed mortgage rates this morning, including these:

  • Mortgage Plus Placement Standard Fixed 2 years: Increase of 15 basis points to 3.54% per year (comparative rate of 3.19% per year*)
  • Mortgage Plus Placement Standard Fixed 5 years: Increase of 20 basis points to 4.49% per year (comparative rate of 3.78% per year*)
  • Mortgage Plus Standard Fixed 2 years: Increase of 15 basis points to 3.24% per annum (comparative rate of 2.86% per annum*)
  • Mortgage Plus Standard P&I fixed 5 years: Increase of 20 basis points to 4.19% per year (comparative rate of 3.45% per year*)

These home loans are for a maximum loan-to-value ratio (LVR) of 80%, borrowing $350,000 or more.

NAB’s acquisition of Citi’s retail banking business is expected to be formally approved by the ACCC later this month.


At a time when variable rates are moving significantly downwards (graph below), AMP decided this week to slightly increase the rates of certain variable mortgages.

  • Owner Busy Professional Package 90%: Up 10 basis points to 2.54% pa (comparative rate of 2.57% pa*)
  • Professional 90% investment package: Up 10 basis points to 2.77% pa (comparability rate of 2.80% pa*)

These home loans repay principal and interest on borrowings up to $500,000.

One of Australia’s largest mutual banks, People’s Choice Credit Union, has also raised rates on a number of fixed home loans.

Notable increases included:

  • Fixed residential P&I 2 years: Increase of 15 basis points to 3.09% per year (comparative rate of 4.40% per year*)
  • Fixed residential P&I 5 years: Increase of 20 basis points to 4.39% per year (comparative rate of 4.61% per year*)

These home loans are for borrowers with up to 95% LVR.

Other customer-owned banks that have raised home loan rates over the past week include Unity Bank, Beyond Bank, Community First Credit Union, which have increased by as much as 35 basis points.


It comes after the proposed merger of Newcastle Permanent and Greater Bank received the approval of the respective board members.

The merger would make the joint team one of the largest customer-owned institutions in Australia, and now is the time for members to vote.

“Together, Greater Bank and Newcastle Permanent have total assets of $19.8 billion and a customer base of approximately 600,000 people,” said Jeff Eather, chairman of Newcastle Permanent.

“It puts us in an incredible position to be a real challenger and remain a strong competitor in the banking industry.”

Over the past 10 years, the number of mutual banks is said to have halved, with less than 70 existing today.


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Lender

Rate Type Gap Redraw Ongoing charges The initial costs LVR Lump sum reimbursement Additional refunds Pre-approval

Variable More details
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Variable More details
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Variable More details
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Variable More details
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Variable More details
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Variable More details
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Basic criteria: a loan amount of $400,000, variable, fixed, principal and interest (P&I) real estate loans with an LVR (loan-to-value) ratio of at least 80%. However, the “Compare mortgages” table allows calculations to be made on the variables selected and entered by the user. All products will list the LVR with the product and price list which is clearly published on the product supplier’s website. Monthly repayments, once the basic criteria are modified by the user, will be based on the advertised prices of the selected products and determined by the loan amount, repayment type, loan term and LVR as entered by the user. user/you. *The comparison rate is based on a loan of $150,000 over 25 years. Please note: this comparison rate is only true for this example and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different comparison rate. Rates correct as of March 18, 2022. See disclaimer.




Disclaimer

The entire market has not been taken into account in the selection of the products above. Instead, a reduced portion of the market was considered. Products from some vendors may not be available in all states. To be considered, the product and price must be clearly published on the product supplier’s website. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au and Performance Drive are part of the Savings Media group. In the interest of full disclosure, Savings Media Group is associated with Firstmac Group. To learn how Savings Media Group handles potential conflicts of interest, as well as how we are paid, please visit the website links at the bottom of this page.


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Harrison Asbury


Harrison is Deputy Editor of Savings.com.au. Prior to joining Savings in January 2020, he worked for some of Australia’s largest comparison sites and media organisations. With a keen interest in economics, housing policy, and personal finance, Harrison strives to provide and edit engaging, thought-provoking, and easy-to-read news and guides.








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