The second wave of out-of-cycle mortgage rate hikes has continued, with another lender announcing increases of up to 20 basis points, via The Adviser.
NAB-owned lender UBank has announced that it has increased interest rates on its fixed rate investor home loan products by 20 basis points, effective for new loans issued as of 14 January.
The lender’s investor mortgage rate increases are as follows:
- A rise of 20bps on its 1-year UHomeLoan fixed rate with interest-only terms, from 3.99 per cent to 4.19 per cent
- A rise of 20bps on its 3-year UHomeLoan fixed rate with interest-only terms, from 3.99 per cent to 4.19 per cent
- A rise of 20bps on its 5-year UHomeLoan fixed rate with interest-only terms, from 4.49 per cent to 4.69 per cent
UBank is the latest lender to increase its home loan rates, after the Bank of Queensland (BOQ) and Virgin Money announced rate increase of up to 18bps and 20bps, respectively.
Both BOQ and Virgin Money attributed their decisions to lift home loan rates to the sustained rise in wholesale funding costs.
The out-of-cycle interest rate rises have prompted calls from some market analysts for a cut to the official cash rate form the Reserve Bank of Australia (RBA) amid weakening housing market conditions and a rise in mortgage stress.
Speaking to The Adviser’s sister publication, Mortgage Business, principal of Digital Finance Analytics (DFA) Martin North said that he expects mortgage stress to continue mounting in the short to medium term, particularly off the back of out-of-cycle interest rate hikes.