SEE ALSO: Interest Only Mortgage Rates Rising For Some, Falling For Others
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As Australia’s interest-only crackdown passes its one year anniversary, it turns out that interest-only mortgage rates for investors have been quietly falling.
Interest-only home loan rates for investors increased between April 2017 and November 2017 – but then decreased between December 2017 and March 2018 (see table below).
At the end of March 2017, the average interest rate for all the interest-only investor mortgages listed on RateCity was 4.64 per cent.
That climbed to 5.08 per cent at the end of November 2017, before gradually falling to 5.02 per cent at the end of March 2018.
Interest-only home loan rates started rising after 31 March 2017, when the banking regulator, APRA, called on home loan lenders to restrict their interest-only lending – particularly for investors.
SEE ALSO: Can a ‘People’s Bank’ really help Aussie home loan borrowers break into the property market?
Over the next eight months, the average interest rates for interest-only home loans listed on RateCity rose by 44 basis points for investors and 29 basis points for owner-occupiers.
But in the four months after that, interest-only rates fell by six basis points for investors even as they climbed by two basis points for owner-occupiers.
The differential between owner-occupiers and investors for interest-only home loan rates has also closed.
At the end of March 2017, the differential was 25 basis points, with investors paying 4.64 per cent and owner-occupiers 4.39 per cent.
It peaked at the end of October 2017, when investors were paying an extra 43 basis points – 5.00 per cent versus 4.57 per cent.
At the end of March, the differential had narrowed to 32 basis points – 5.02 per cent versus 4.70 per cent.
INFORMATION BY RATECITY
| Date (end month) | Owner-occupiers | Investors | Differential |
|---|---|---|---|
| March 2017 | 4.39% | 4.64% | 0.25% |
| April 2017 | 4.43% | 4.77% | 0.34% |
| May 2017 | 4.44% | 4.81% | 0.37% |
| June 2017 | 4.51% | 4.90% | 0.39% |
| July 2017 | 4.55% | 4.97% | 0.42% |
| August 2017 | 4.58% | 5.01% | 0.43% |
| September 2017 | 4.57% | 5.00% | 0.43% |
| October 2017 | 4.57% | 5.00% | 0.43% |
| November 2017 | 4.68% | 5.08% | 0.40% |
| December 2017 | 4.68% | 5.07% | 0.39% |
| January 2018 | 4.69% | 5.06% | 0.37% |
| February 2018 | 4.70% | 5.06% | 0.36% |
| March 2018 | 4.70% | 5.02% | 0.32% |
