A Commonwealth-backed Indigenous loan provider has decided against increasing its interest rates to reflect the Reserve Bank of Australia’s May rate hike.
IBA’s introductory rates have remained between 1.14 per cent for those earning up to $75,670 or 4.14 per cent for people earning between $147,000 and $222,000.
The standard variable home loan rate for owner-occupied homes remained at 4.14 per cent, 0.15 per cent below comparison rates.
An IBA spokeswoman said ballooning home prices and tightening supply had put downward pressure on home loan applications this financial year.
Applications are strong but affordability issues due to price rises and lack of supply have seen a slight reduction in approvals from last year,” she said.
“We are exploring options to assist more people but whilst lending responsibly and not putting people in financial hardship.”
The lender provided 372 loans totaling about $154 million for the financial year to April, about $13m more than 2020-21 and $2m less than 2019-20.
Some $3.6bn in loans to nearly 21,000 people have been provided since the inception of the home ownership program.
IBA loans can been taken out with low deposits with no lenders mortgage insurance required.