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A South Australian-based lender has announced a 15 basis point increase on an equity loan product.
South Australian government-owned lender HomeStart Finance has announced that it has increased interest rates on its Seniors Equity Loan by 15 basis points from 5.94 per cent to 6.09 per cent.
The lender noted that the new rate for its Seniors Equity Loan will be effective for all new loans from 29 January 2019, and for existing loans submitted after 23 May 2016.
HomeStart’s announcement follows the decision of the Bank of Queensland (BOQ) to hike interest rates across several of its home loan products in response to the sustained rise in wholesale funding costs.
BOQ noted that its rate hikes include an 11-basis point rise on its Economy Owner-Occupier Principal and Interest product, and an 18-basis point increase on “all other” retail home loan products
However, BOQ stated that there will be no change to rates on its Clear Path Owner-Occupier Principal and Interest product.
HomeStart is the latest bank to hike rates out-of-cycle, after several lenders, including three of the big four banks, increased rates throughout 2018, citing the rise in funding costs.
However, the rate increases from BOQ and HomeStart come off the back of a mortgage rate reduction by Commonwealth Bank-owned lender Bankwest, which reduced rates by up to 16 basis points on several of its owner-occupier home loan products.
[Related: Cost pressures compel bank to pull rate trigger]
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