Interest Only: PI Rate Movements
The average interest only investment loans with a variable rate have shot up by 73 basis points due to rate movements beginning last November.
These figures, from the latest Reserve Bank of Australia (RBA) Statement on Monetary Policy released on 3 August 2017, reveal this increase was caused by a double whammy of rate rises in November and again in June.
“Since May, most lenders have increased their standard variable reference rates for interest-only loans by around 30 basis points and reduced standard variable rates for principal-and-interest loans to owner-occupiers by around five basis points,” the RBA wrote.
The average fixed and variable rates, as well as the associated changes since November, are listed below:
| Interest rate | Change since Nov 2016 | |
| Variable P&I rate | ||
| Owner occupier | 4.41% | -4 basis points |
| Investor | 4.98% | +29 basis points |
| Variable IO rate | ||
| Owner occupier | 4.98% | +52 basis points |
| Investor | 5.46% | +73 basis points |
| Fixed P&I rate | ||
| Owner occupier | 4.14% | +3 basis points |
| Investor | 4.45% | +20 basis points |
| Average outstanding rate | 4.63% | +13 basis points |
– Carl Thompson – Commercial Lending Specialist, Strategic Investor Group
Loving the information on this site, you have done great job on the articles.