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Virgin Money has introduced rate increases for new high LVR lending and new and existing interest-only lending.
Effective 7 July, Virgin Money customers will see the variable rate for new loans with LVRs 90.01 per cent and above grow to 4.84 per cent per annum (p.a.), regardless of loan size.
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As a result, for loans between $75,000 and $499,999, the new variable rate is 35 basis points higher, while for loans of $500,000 to $749,000 the increase is 40 basis points. Loans of $750,000 and above will see a hike of 45 basis points.
Fixed rates for new one to five-year loan terms with LVRs over 90 per cent have also jumped by 20 basis points, bringing one-year term rates to 4.44 per cent p.a., two and three-year terms to 4.19 per cent p.a., four-year terms to 4.54 per cent p.a. and five-year terms to 4.69 per cent p.a.
Interest-only hikes
As of 8 August, standard variable rates for new and existing interest-only loans for both owner-occupier and investors will jump by 0.25 per cent p.a.
Rates for existing owner-occupiers will grow to 4.89 per cent p.a. while rates on existing investment loans will reach 5.19 per cent p.a.
For new owner-occupied interest-only loans with LVRs up to 70 per cent, rates differ between loan sizes. Owner-occupier loans between $75,000 and $499,000 will grow to 4.39 per cent p.a., while those of $500,000 to $749,999 will reach 4.34 per cent p.a. and those of $750,000 and above will tick up to 4.29 per cent p.a.
Investment interest-only loans with LVRs of up to 80 per cent will see the new rates differ depending on loan size. Loans of $75,000 to $499,000 will rise to 4.69 per cent p.a. while those of $500,000 to $749,999 will reach 4.64 per cent p.a. and those of $750,000 will hit 4.59 per cent p.a.
The rate hikes follow a spate of out-of-cycle increases on interest-only loans across Australian lenders. The hikes follow regulatory directives to curb interest-only lending, as well as the introduction of a major bank levy, although many banks have denied a connection.
The lender also introduced new special offers for two and three-year fixed principal and interest investment loans (with LVRs of 90 per cent or less) and owner-occupied loans, for borrowings of $300,000 and above.
[Related: Broker calls for crackdown on ‘out of control’ rate hikes]
