CBA interest only variable rate increase? 4 April

Thank you for choosing to have your investment home loan with CommBank. We're contacting you about an important change.

What's changing

The variable interest rate on your interest only investment home loan will increase by 0.12% p.a. to 4.48% p.a. from 3 April 2017. This means your monthly interest payments will increase.

did anyone else get this email from CBA? or just me?

 

Me too!

 

See attached

 

good to know. I thought I was targeted coz i left a slightly negative comment on CBA's forums

increase by 0.12% p.a. was yours point 12 pc as well? (if you dont mind me asking.)

 

This was announced to brokers about a fortnight ago, there was even a discussion in one of the threads here about it.

A 0.12% increase will be applied to all interest only investment loans.


Remember a year ago how the CBA was aggressively discounting loans and people were falling over themselves to get a better deal? This is how they pay for it.

 

Was 4.36

Now 4.48

Ha... we have the same rate

 

That would be fully unlucky.

I got the same email. But I've just sold the only property I have with CBA (Mt Druitt 2 bed apartment ) so it wont mean anything to me. This was announced a couple of weeks back so its no surprise... there will be more to come in 2017

 

That's so strange my email states the new rate but yours doesn't...


but both from Dan Huggins... Dan? why u do this?



"Thank you for choosing to have your investment home loan with CommBank. We're contacting you about an important change.

What's changing

The variable interest rate on your interest only investment home loan will increase by 0.12% p.a. to 4.48% p.a. from 3 April 2017. This means your monthly interest payments will increase.

What you need to do

There's nothing you need to do and you can remain on a variable interest only rate.

However, if interest only payments no longer meet your needs and objectives, you can easily switch your repayment type to principal and interest at any time in NetBank. With principal and interest repayments, your variable interest rate would be 4.36% p.a.

Click here for more information on how to change your repayment type.

How to contact us

If you have any questions, simply call our Home Lending Specialists on 13 2224 and select option 5 between 8am and 8pm, 7 days a week, or visit any CommBank branch.

Yours sincerely,
Dan Huggins
Executive General Manager, Home Buying"

 

A sign of the times..... the beginning, start reviewing your portfolio and tack on an extra 2-3% can you service debt?? ouch

 

hey peter, well... i missed that I thought that was referring to the increase 2 months ago (December increase)...

03/04/2017 4.48%
04/12/2016 4.36%
19/08/2016 4.29%
20/05/2016 4.42%

in a span of 1 year CBA has upped their interest rate back to original rates before RBA did the OCR cut.... not happy....

 

Economists are predicting more rate cuts this year, but does anyone really believe that consumers will see much of it? There's been a pricing war going on for about 2 years now. The banks have turned it to their advantage very nicely (yet again).

 

Even if there are cuts, they will be short lived even if they are passed on.
The banks will move up, regardless of RBA movements. Or at the very least you wont see much of the cut.

Personally - unless Sydney slows down, I dont think the RBA will cut again.

Blacky

 

If you understood the financial markets, you would understand why. There will be no further interest rates cuts this year. We have seen the bottom on the rate cycle. Bond yields globally have been rising since mid-2016, and will continue to rise. Only interest rate rises from here on on. I think we could see the first 0.25% rise maybe Dec 2017, Feb 2018.

And yes, I am extremely happy the banks are raising interest rates . First 0.7% on fixed term, now on I/O Investor loans. Excellent. Keep going. They fully understand now the dangerous state markets such as Sydney have gotten to (with further 18% rise in 2016).
Nicely falling into place for a 2019/2020 Sydney deep correction .

 

Also got the same email today. Is it worth reverting to P & I to save .12% increase?

 

Sure, it'll save you 0.12% interest.

You'll also pay about an extra 30% which will come off the principal.

In other words, you'll pay less interest but your repayments will significantly increase as you're paying off the principal. Your cash flow won't be as good but you'll eventually own the property outright.

 

Rates won't rise by 2-3% unless the economy improves, which should lead to wage growth etc. If anything the RBA will cut rates again this year (if it does anything at all) but banks won't pass anymore cuts on and will just bank the margin.

 

@MTR is referring to the increased assessment rates that will apply when pre APRA I/O loans expire and need to be re-assessed. They are @ 3% higher than the "actual" rate you are paying.

What the RBA does with rates is now irrelevant from a borrowing capacity perspective. As are the rates charged to borrowers (rate to borrower) by banks. It is assessment rates that determine things, now. They are low-mid 7% now, and that's what you have to be able to pass servicing with.

 

This 12bps change was announced along with the CBA profit report back in Feb...

I've decided to switch my loans back to P&I. The plan since I fully offset my PPOR 18 months ago has been to pour half my savings into offsets against the investment loans and half into shares.

I figure for me and my circumstances there's no real difference between paying down investment debt and paying into offsets so why not revert to P&I early. Cash flow is unaffected really because I was already setting aside more.

I also can only see investor rates increasing. Still... I kinda think any rate under 5% is fantastic when compared with history.

 

oh really if u change to principal and interest they charge you less???

 

Yep, I got the same email. My junk mail captured it and it's still there. I was interested that it came as a generic email rather than either an addressed email or by mail.