APRA want you to go on a debt diet

APRA wants you to go on a debt diet and it seems to be getting its way…

National Australia Bank has followed Westpac and ANZ, hiking rates for mortgage holders making interest-only repayments, while reducing rates for owner-occupier customers paying off their loan. bank reserve interest rate save money finance loan

Investors and owner occupiers who opt for interest-only will have to stump up an extra $102 a month, or $1,224 a year, based on the average loan size of $350,000 over 30 years.

Owner-occupiers paying principal and interest have been given a small reprieve with $17 a month off their repayments, a savings of $204 a year.

RateCity Money Editor Sally Tindall said today’s changes were once again attributed to APRA’s new regulatory requirements.

“An astounding 41 per cent of loans on the Big4 banks’ books are interest-only. 

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That’s a huge proportion of Australians who aren’t paying off a single cent of debt.

“It’s no wonder APRA is coming down hard. They want Australian mortgage holders to go on a debt-diet.

“Paying interest-only, particularly when you are an owner-occupier, is an expensive business.

“The average owner-occupier who elects to pay interest-only for the first five years of their loan will pay $67,810 extra to NAB over the life of their loan.

“When you look at the big picture, a couple of hundred dollars in savings each month pales in comparison to the long-term benefits of paying down debt,” she said.

NAB STANDARD VARIABLE RATE (SVR) CHANGES

Nab stabdard variable rate

Calculations based on the average sized Australian loan of $350K over 30 years.

BIG4 – CURRENT SVR RATE LIST

BIG4

from Property UpdateProperty Update https://propertyupdate.com.au/apra-want-you-to-go-on-a-debt-diet/

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