The prudential watchdog chose to keep the serviceability buffer – an extra rate of interest a bank must assess a borrower as capable of meeting on top of their actual repayments – at 3% despite calls from major banks to lower it.
NAB recently called for the buffer to be dropped in an effort to help first home buyers into the market.
Meanwhile, inflation remained stubborn despite the continuously high cash rate.
The Reserve Bank of Australia (RBA) is in charge of the cash rate, which influences interest rates, and is holding it high in an effort to tame consumer prices.
Monthly inflation (a less-complete read than its quarterly counterpart) remained flat at 2.1% in October while the RBA's preferred underlying inflation ticked higher to 3.5%, the Australian Bureau of Statistics (ABS) revealed on Wednesday.
That could dampen hopes of a February rate cut, as is still predicted by CommBank and ANZ despite doubts from NAB and Westpac.
So now we're caught up, let's dive into this week's major home loan rate changes.
Bank of Sydney drops select variable rates by more than 1%
Bank of Sydney introduced significant changes to its Expect More Home Loan lineup, cutting rates for certain borrowers by more than 100 basis points.
The bank now caters to borrowers with deposits as small as 5%, having added a new loan-to-value ratio (LVR) tier to its offerings.
Previously, advertised rates were only available to borrowers with LVRs of 90% or less, and higher LVR borrowers faced rates of up to 7.55% p.a.
Following this week's changes, high-LVR borrowers could realise these advertised rates (plus Lenders Mortgage Insurance):
| LVR | New rate | Comparison Rate* |
|---|---|---|
| 80-90% | 6.54% | 6.69% |
| <95% | 7.09% | 7.23% |
The Expect More Home Loan includes features like an offset account and fixed rate options but generally advertises higher rates than the bank's BOS Basic Home Loan lineup.
Up Bank to up variable rate by 5 basis points
Just making the mark for this week's rate wrap is Up Bank, which is gearing up to increase the variable rate advertised on its Up Home product by five basis points.
Up Bank is a part of the Bendigo Bank family and markets itself as a fresh face in the financial landscape, with a cult following that praises its tech fit out.
And fresh indeed – Up has warned would-be borrowers of a rate hike ahead of time, advertising the change on its website and even exposing it in the media.
Here are the changes to be implemented on Saturday:
| Product | Change | New rate | Comparison rate* |
|---|---|---|---|
| Up Home Variable | +5 basis points | 6.00% | 6.00% |
The bank's fixed rate lineup will also see comparison rate changes, seemingly due to the fact that Up's revert rate is the same as its variable rate.
Other movers
- The Mac dropped fixed rates on its Standard home loans by up to 20 basis points
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Lender Home Loan Interest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option Tags Features Link Compare Promoted Product Disclosure
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Collections: Mortgage News Bank of Sydney News & Guide Collections
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