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Interest rate change for interest-based home loan customers

Newcastle Permanent has announced changes to interest rates applicable to variable rate home loan products with Interest Only (also known as interest-based) repayments, effective from Wednesday, 12 July 2017.

Friday 30 June, 2017.

From Monday, 10 July affected customers will be notified of their applicable interest rate change and the reason for the change, and in early August customers will receive a letter advising their new minimum monthly repayment amount. To allow customers time to budget, their new repayment amount will not become effective until September 2017.

Comments from Newcastle Permanent Acting CEO Mark Williams:

"Recently the banking regulator announced a number of initiatives to manage the level of growth and resilience of the housing market. One of these initiatives was to restrict the level of Interest Only home lending in Australia and encourage Principal & Interest loan repayments.

"As a result of recent competitor moves and in order to meet our regulatory requirements, our variable home loan interest rates with Interest Only (also known as interest-based) repayments and credit facilities will increase by 0.35% p.a. effective on Wednesday 12 July 2017. The increase of 0.35% p.a. changes a customer’s repayments by approximately $29 per month for each $100,000 of their loan balance, based on a 30 year loan term.

"There’ll be no increases in variable home loan rates for customers with Principal & Interest repayments. We offer lower interest rates to those customers to help them pay off their home loan sooner, and for those who would like to switch to Principal & Interest repayments, we will waive the fee until 30 September 2017.

"Even after this interest rate announcement, our variable rate home loans remain some of the most competitive in the country.

"We regularly review our interest rates to balance the long-term benefit for all our customers including those with home loans and deposit accounts. Our variable rate home loans are some of the most competitive in the country, and we remain committed to helping our customers own their homes sooner."

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