Heritage Bank announced today that changing environmental conditions had forced an increase to interest rates on investment home loans, effective from 17 January.
Rates on new and existing variable investment loans will increase by 0.15%, while 2 - 5 year fixed rate loans will increase by 0.10%
CEO Peter Lock said the decision reflected the changing funding environment that financial institutions now faced.
“The cost of funding our loans is affected by the overall state of financial markets. Changing circumstances such as increased financial volatility do have an impact on markets and can flow through to increase our costs,” Mr Lock said.
“It’s important to note that we retain all the profits we make, and use them to benefit our customers. That’s unlike the big banks, which use profits to pay dividends to shareholders.
“It’s also important to note that our customers include investors and depositors, as well as borrowers, and our pricing decisions have to keep their interests in mind as well.
“We will continue to adjust our pricing, for both depositors and borrowers, depending on what is happening across the marketplace.
“Our home loan rates remain among the most competitive in the country.”