More investors are set to be hit in the wallet after another one of Australia’s major banks announced an interest rate hike for investor home loans.
The Commonwealth Bank (CBA) becomes the second Australian lender to announce a rate increase and will join the ANZ in raising interest rates
for its investor loans from Monday, 10 August.
From then the CBA’s standard variable rate for investor home loans will increase by 0.27% to 5.72% p.a, while fixed rates for 1,2,3,4 and 5 year investor home loans will rise by 0.10% to 0.40% p.a.
Interest rates for fixed owner occupied loans will be reduced by up to 0.30% p.a. from this week.
The increases come in the same week Australia’s major banks were told by APRA to hold more capital against their mortgage books
, and CBA group executive for retail banking Matt Comyn said the bank supported measures that encourage sustainable banking practices.
“As Australia’s largest home lender, we support the prudential regulator’s actions to ensure lending practices remain sustainable and we have been actively managing our investment home loan portfolio to remain below the 10% growth limit,” Comyn said
“Despite making a range of changes to our investor lending policies in the past few months we have witnessed ongoing investor lending growth, and at an industry level, investor lending approvals remain 22% higher than 12 months ago,” he said
“In the current market conditions, we believe these changes strike an appropriate balance in our portfolio between owner occupied home loans and those seeking investment loans.”
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