Ubank home loans: Mortgage payers slugged by another interest rate rise – as bank jumps the gun before the official RBA decision

An Australian bank has raised interest rates on fixed and variable mortgages, days before the RBA meets for its March meeting.

Mortgage holders got a brief reprieve over the past month, with the RBA pausing to raise the cash rate target at its February meeting.

Despite this, ubank, which is part of National Australia Bank, delivered increased interest rates to its customers on Thursday, with some loans jumping by 0.1pc.

Ownership loans with variable interest rates have increased by 0.05 percent this month, while variable interest rates on investor loans have increased by 0.1 percent.

However, the bank offers a small relief to borrowers who want to take out a fixed-rate loan, either as an owner or investor.

One-year fixed-rate loans fall by 0.35 percent from 7.04 percent to 6.69 percent, while a fixed-rate loan over a five-year period falls by 0.49 percent to 6.55 percent.

The new rates apply to any application that is unconditionally approved on or after March 14.

The RBA board is scheduled to meet on March 18 and 19, where it is widely expected to keep interest rates on hold at a 12-year high of 4.35 per cent.

Analysis released by economists at the Commonwealth Bank, the country’s biggest lender, showed that in the 12 months to December borrowers paid almost 40 per cent more on their home loans.

Mortgage repayment costs had risen by a “massive” 162 percent since their lowest point during the pandemic, the analysis showed.