Over the last couple of weeks we have seen all the major Banks lift their standard variable rates outside of any changes announced by the Reserve Bank. The standard variable rate amongst the majors is now on average 5.63% for owner occupied loans. For investors the Banks moved about six weeks ago, with the rates generally 0.17% higher at 5.8%.

The banks moved on the investor space due to regulatory concerns about investors overheating the Sydney and Melbourne property markets. The increase more recently for owner occupied loans is to meet new regulatory requirements to be placed on them as to how much capital they must hold for a mortgage. These changes add a cost to the Banks for writing a home loan and they are passing this cost on to their customers.

Whilst the major Banks have moved to increase rates there are still very good deals outside the Big Four. AFG Home Loans are offering variable rates from 3.99% and a two-year fixed rate at 3.94%. There are also a range of lenders offering variable rates under 4% including ING and Auswide Bank.

Of course standard variable rates are not the Banks final position; all lenders continue to offer discounts that aren’t advertised. Most lenders continue to offer a minimum discount of 0.7% on their “package” loans; however discounts of 1% or more are being seen at the moment.

As well as increasing interest rates, lenders are also reviewing their credit policies to ensure lending standards are maintained. This may mean you need to do more work and provide more documentation to obtain a loan approval.

Now more than ever, you should talk to a mortgage broker. They know which lenders are offering the best rates and understand the lenders policies and requirements. Not only could your mortgage broker save you thousands in repayments, they may also make it easier for you to buy a property whether it is your home or an investment.