A major Australian bank is lowering new customers’ home loan interest rates by increasing a promotional discount, less than a week after the cash rate was changed.
St George made the announcement on Monday morning, telling homeowners a range of loans will be impacted, with its “life of loan” promotional discount being increased by 0.05 per cent p.a.
This will result in owner occupiers having a 4.20 per cent rate if paying principal and interest or 5.40 per cent if paying interest only.
New home loan applications submitted from Monday will receive the above new “life of loan” promotional interest rate.
Last week, St George announced home loan variable interest rates will increase by 0.25 per cent p.a. for new and existing customers from October 18.
It comes after the Reserve Bank of Australia increased the cash rate by 0.25 per cent to 2.6 per cent last Tuesday.
The cash rate is now the highest since 2013 after the sixth consecutive hike since May 2022.
The RBA has continued its fast pace of rate hikes in order to ensure inflation expectations remain anchored around its 2 to 3 per cent target.
A homeowner’s average monthly repayment is $2966 a month and $35,592 a year, according to Finder, with the latter figure up $8820 in the past six months.
A national finance and mortgage broker focus group has revealed individuals who have recently been through a marriage or relationship breakdown will be heavily impacted.
Finance Brokers Association of Australia managing director Peter White said this was the biggest concern of brokers polled.
He said tightening credit assessments left those recently divorced or separated paying the price, calling it “grossly unfair”.