AMP hikes mortgage interest rates

Via Australian Broker:

Weeks after posting a 97% drop in profits, a wealth management company has announced changes to its home loan offerings.

In the next few days, AMP Bank plans to decrease a range of fixed rate loan options as well as increase variable rates.

“We have held off passing this cost on to existing customers for as long as we can. We are managing our loan portfolio in a very active market and decisions on rates are never taken lightly,” said AMP chief executive Sally Bruce.

When the bank shared its financial results in mid-February, it attributed its 2018 earnings being less than the year before to several factors, including higher cash outflows and the ongoing impact of the royal commission.

Now, variable lending rates for new and existing owner occupiers and investors will increase by 0.15% p.a.

“The change in variable rates is driven by an increase in costs,” said Bruce.

The bank also announced two new fixed lending offers: the three-year package investment P&I at 3.99% per year, and the five-year package owner occupied P&I at 4.05%.

AMP clarified that the two-year fixed rate of 3.75% for owner occupied principal and interest customers will continue to be offered.

The rate changes go into effect on 8 March for new business and 11 March for existing business.

Drip, drip.

Comments

  1. The real reason behind this is that their long term credit rating got downgraded from A to A- (and A-1 to A-2 short term) last week which will increase the cost of their market securities going forward.

    They are still on negative watch so a downgrade into the BBB dumpster area will further impact funding.

    • Don’t care about the reason – just hope the Big 4 and others will use this as an excuse to push up rates too. Still plenty of time before the long weekend!

      • No better time!

        (Seriously though, there is every chance they will hang tight to see if the RBA is gonna cut and if Budget stimulus is coming. They can handle a few more months, right?)

  2. great time to buy….lock in a fixed rate for the next three years….boom your in the black by 2022…bears jump at shadows and miss out

  3. Jumping jack flash

    Well look at it another way:

    If all the banks raise, and then the RBA cuts and then the banks cut by as much as they raised, then everyone is happy.
    Relief for the hopelessly mortgaged. The economy is saved!