Ongoing cost pressures have forced Heritage Bank to pass on a slight increase to variable interest rates for some owner-occupier home loans.
Variable interest rates on selected products will increase by 0.10% from today (Thursday, 4 May).
Even after the increase, Heritage’s Standard Variable rate will be just 5.14%, and the special Discount Variable rate will be just 3.99%.
By comparison, the average standard variable rate of the four big banks is 5.33%
CEO Peter Lock said Heritage always strived to provide borrowers with the best rates possible, but had to balance that desire against the need to protect the long-term sustainability of the business.
“Unlike the big banks, maximising profit is not our top priority,” he said
“However we do need to keep investing back into the business with a range of technology improvements and branch upgrades to provide our customers with great service,” he said.
“We’re in an environment where we are facing higher costs to provide our services and the investment needed to improve them.
“To afford that investment and to remain sustainable, we have to recoup the extra costs that we’re currently incurring to run the business.
“As always, the long-term best interests of our customers are top of mind in any decisions that we make.”
Mr Lock said it was also important to consider the interests of all Heritage customers, which included savers as well as borrowers.
“People like retirees rely on the income they receive from their savings and investments to pay for their everyday living expenses. We have to be mindful of their situation, and the impacts of pricing decisions.
“That’s why we’ve also decided to increase the interest rates payable on a number of our Term Deposits, also effective from 4 May,” he said.
The 3-year Term Deposit rate will increase 0.20% to 3.00%, while the 4-year and 5-year rates will increase by 0.15% also to 3.00%.