Following moves last week by the ANZ and CBA to hike mortgage rates on investor loans by 27 basis points, the NAB has today announced it will hike rates on interest-only loans by 29 basis points, a move also designed to slow down investor housing lending growth.
Significant growth in investor-only loans has been raising concern among financial regulators as investors pile into interest-only loans to take advantage of ever rising home prices. APRA statistics for the March 2015 quarter found interest-only loans made up 42.3 per cent of all new loans issued.
While the move by NAB will target both owner occupiers and investors using interest-only loans, NAB said interest-only loans were “predominant structure for investors.”
Westpac has today announced a $750 million corporate note issue to help bolster capital reserves as news spread that Westpac had last week put in place a hiring freeze for all non-critical roles, initially said to last three months.
According to a Herald Sun article, Westpac was unable to follow ANZ and CBA, jacking up investor only loans due to a deficiency in its computer systems. It is understood Westpac technical staff are checking back-office systems to ensure owner-occupier and investor customer information is correct.
A Westpac spokesperson told News Limited, “Given we haven’t had differential pricing across the mortgage book for a number of years, if this was to be introduced we must ensure a smooth transition for affected customers,”
This could suggest a rate hike is still coming for property investors financed through Westpac.
» Will Westpac follow the pack and hike investment home loan rates? Computer says ‘not yet’ – The Herald Sun, 27th July 2015.
» Westpac confirms three-month hiring freeze – Business Insider Australia, 27th July 2015.
» NAB raises rates on interest-only home loans – Sydney Morning Herald, 27th July 2015.