5 July 2019
Heritage Bank will take a balanced approach to rate cuts across its portfolio to help serve the best overall interests of all its members, CEO Peter Lock said today.
That followed the Reserve Bank’s decision this week to reduce the official cash rate for the second month in a row.
Mr Lock said Heritage had to come to a decision that balanced the needs of both borrowers and investors, as well as the long-term best interests of Heritage as a whole.
As a result, Heritage will cut its variable home loan rates by 0.15%, and will cut its fixed rate home loans by up to 0.30%.
That means the lowest rate now available on a variable home loan with Heritage will be 3.42%.
Further, Heritage will also reduce interest rates by 0.25% on variable rate personal loans and credit cards – assisting customers who often miss out when home loan interest rates are cut.
Mr Lock said Heritage had passed on as much of the rate cut as it was possible to absorb without impacting on the best interests of members as a whole.
“It’s important to remember that the RBA cash rate is only one of a number of variables that affect the costs we incur to fund our lending,” Mr Lock said.
“Just because the RBA cuts the cash rate by a certain amount, that does not mean our costs automatically fall by the same amount.
“We must maintain the financial strength that our members demand and that we pride ourselves on delivering.
“We must also consider the interests of depositors, such as self-funded retirees and pensioners, who depend on the interest they receive from us, as well as borrowers.
“Our decision on interest rates represents a balanced approach, with consideration given to the impacts on all of our members.”
Mr Lock said Heritage’s interest rates remained extremely competitive, especially compared to the big banks.
“We’re confident that we continue to provide a fantastic overall package for our members - great products, great rates, and great service.”
The changes to the variable lending rates come into effect from 18 July.