Variable home loan rates hiked as average mortgage surpasses $625k

The average new owner-occupier home loan is worth upwards of $625,000, new data released by the Australian Bureau of Statistics (ABS) reveals.

The typical investor borrows $648,000 while the average first home buyer signing a loan borrows $532,000.

Each of those figures were between 7% and 10% higher in April 2024 than in the same month of 2023, perhaps due to still-rising house prices.

The national median house price is now above $785,000, as per CoreLogic data.

The data firm crowned Brisbane the nation's second most expensive city to purchase property last month, with the Sunshine State capital's median dwelling value surpassing that of Canberra.

Despite that, Brisbane is the most welcoming capital city for first home buyers, according to PRD's latest Affordable & Liveable Property Guide.

Houses in more than a quarter of the city's suburbs are 'affordable', compared to one in ten Sydney suburbs, the report found.

However, serviceability is holding many owner-occupier buyers back, the ABS noted, leading investors to take charge in the market.

Of course, home loan interest rates are a key factor in serviceability tests, and this several many lenders hiked theirs.

So, what mortgage market changes should would-be buyers be aware of this week? Let's dive in.

Bank First hikes variable rates by up to 15 basis points

First home buyers might be disheartened to learn that Bank First has upped the interest rates on many of its variable products for borrowers with loan-to-value ratios (LVRs) of 80% or more.

The changes have impacted products for both owner-occupiers and investors, making interest only (IO) or principal and interest (P&I) repayments.

Those made on its Basic Home Loan product include:

Product Name	Change	New rate (% p.a.)	Comparison rate (% p.a.)
Basic Home Loan owner-occupier, P&I, 80-90% LVR	+10bp	6.49%	6.52%
Basic Home Loan owner-occupier, P&I, >90% LVR	+15bp	6.99%	7.02%
Basic Home Loan, investor, P&I, 80-90% LVR	+10bp	6.89%	6.92%
Basic Home Loan, investor, P&I, >90% LVR	+15bp	7.49%	7.52%

MyState Bank lifts variable rates by 5 basis points

Another mutual lender making changes to its variable rate line up this week was MyState Bank.

It raised the rate on its Basic Home Loan product for owner-occupiers with LVRs of between 70% and 80%.

The new rate offered on the product is 6.19% p.a., with the comparison rate being 6.22% p.a.

IMB drops rates on investment loans

Finally, IMB made changes to its home loan offerings, with property investors turning to the bank coming out as winners.

Owner-occupiers considering the bank might be interested to learn the variable rate on its Essentials Home Loan for those with LVRs of 80% or less making P&I repayments has been hiked 5 basis points to 6.24% p.a. (6.39% p.a. comparison rate*).

Meanwhile, investors might find their attention piqued by these newly lowered rates:

Product Name	Change	New rate (% p.a.)	Comparison rate * (% p.a.)
Investment Budget Home Loan, P&I, ≤80%	-5bp	6.29%	6.35%
Investment Essentials Home Loan, P&I, ≤80%	-10bp	6.34%	6.51%

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_{Image by Justin Snyder Photo on Unsplash}