Lender hikes interest rates by 20bps

A lender has increased home loan interest rates, as experts predict this trend will continue in 2019.

Virgin Money today announced changes to its variable rates for all existing principal and interest (P&I) and interest only (IO) home loans, increasing rates by 20 basis points (bps).

The group said the majority of standard variable rates for new home loan applications will remain unchanged, with only a few set to increase.

Virgin Money also announced it is reducing fixed rates by between 5bps and 10bps for the following products:

• Two and three year fixed rates for owner occupier principal and interest loans over $300,000 with an LVR of 90% and under; and
• Two and three year fixed rates for investment interest only loans with an LVR of 90% and under.

Click here for a full list of rate changes.

Virgin Money’s general manager, lending, cards & deposits, Johnny Lockwood, said, “The decision to increase interest rates is never easy.

“We have absorbed higher funding costs for the last twelve months in order to delay the impact for our home loan customers. Unfortunately, funding costs remain high and are likely to remain elevated into the foreseeable future."

The interest rate changes are effective Friday, 11 January 2019.