Heritage announces changes to interest rates
Australia’s largest building society, Heritage, has announced an increase in interest rates on its variable rate mortgage loans following the Reserve Bank of Australia’s (RBA) decision to increase the Official Cash Rate by 0.25 per cent. Selected savings and investment products will also rise by up to 0.70 per cent.
The interest rate increase for Heritage’s new and existing variable rate mortgage loans will increase by 0.35 per cent, excluding the Society’s Professional Pack and Basic Variable loans that will increase by 0.42 per cent.
Variable rate mortgage loan increases will be effective from Friday December 11, 2009. Term deposit and savings interest rate increases were effective Saturday December 5, 2009.
Heritage CEO Mr John Minz highlighted that as part of Heritage’s commitment to its People first philosophy, the Society had taken the decision not to increase its credit card and personal loan product interest rates despite cash rate increases in each of the last three months.
“To minimise the impact that the interest rate increase has on our members, Heritage will delay the change to mortgage loan repayments until February 1, 2010,” he said.
“With an average increase of around $40 per month to the average mortgage, this delay in repayments until 2010 will allow our borrowers additional time to make household budget adjustments particularly following the Christmas period.
“We understand that any increase in mortgage repayments is a challenge for household budgets, however this increase will ensure that Heritage maintains sustainable margins given the increased cost of funding in the marketplace. This will allow us to protect our depositors and importantly to ensure that we can continue to invest in the business and deliver long term additional member benefits.
“Despite this increase, Heritage’s variable interest rates continue the long term trend of being lower than the average of the major banks and the majority of other lenders. When you compare our lending rates with those of the banks, the rate differential provided to members has improved in recent years.”
Mr Minz added, “As Australia’s largest mutual building society, Heritage continues to provide the ‘mutual difference’ to its members by charging lower interest rates, lower fees and charges and higher deposit rates.”
Heritage is committed to its philosophy of putting People first and continues to be a strong competitor in the financial services sector, offering a better service and pricing structure in comparison to the major banks.