Investment variable rate changes
Tuesday, 28 March 2017 17:00
SERVICE ONE announced a 25-basis point increase to the SERVICE ONE Alliance Bank range of variable rate home loan products for investment purposes.
The following changes will take effect Friday 7 April 2017 (unless otherwise indicated) and will be applied to existing loan products from this date:
|Loan type||Old rate (% p.a.)||New rate (% p.a.)||Change|
|Standard Variable (index rate)||5.35||5.60||+0.25|
|- for loans under $50k||5.35||5.60||+0.25|
|- for loans between $50k and $249,999||4.85||5.10||+0.25|
|- for loans between $250k and $499,999||4.70||4.95||+0.25|
|- for loans over $500k||4.60||4.85||+0.25|
|Pioneer Banking Package ($200k - $499,999)||4.75||5.00||+0.25|
|Pioneer Banking Package ($500k or more)||4.60||4.85||+0.25|
|Visa card with a credit facility secured to an investment home loan (effective 4 May 2017)||5.35||5.60||+0.25|
Members with loans affected by these changes will receive correspondence confirming the change and how it impacts them.
General Manager - Banking, Tony Brown, provided some insight into the decision.
"... as a response to pressure on funding costs, increasing investor appetite and the regulator's increased focus on investment lending, many lenders have increased the interest rates for variable rate loans for investment purposes. Bendigo and Adelaide Bank recently decided to increase these rates and SERVICE ONE Mutual Limited, after review, has decided to lift these rates by 25 basis points," Mr Brown said.
The variable loan rate increase equates to approximately an additional $52 in monthly loan repayments for a loan of $350k over 25 years.