Heritage announces changes to interest rates

Australia’s largest building society Heritage has announced an increase in interest rates on a number of variable rate loan products by 25 basis points (0.25%) following the Reserve Bank of Australia’s (RBA) decision to increase the Official Cash Rate by the same amount.

The change is applicable to all variable rate Home Loans as well as the Cake and the Eat It Personal Loan and is effective from Saturday, 10 April 2010.

Heritage CEO Mr Minz said Heritage had reluctantly made this decision following the Reserve Bank’s official cash rate increase by 0.25% on Tuesday, 6 April.

“Heritage continues to operate in a difficult environment where funding costs have increased, particularly for smaller institutions,” Mr Minz said.

“Despite this, Heritage’s interest rates are still lower than the average of the major banks and the majority of other lenders.

“Heritage continues to absorb some of the higher funding costs that are a part of the current banking landscape, to ensure our members receive the most competitive rates possible in the circumstances”

The Society will move to minimise the impact the increase to variable mortgage loan rates will have on its members by delaying the change to repayments until 1 June, 2010.

However, Mr Minz also announced that Heritage would move to increase the interest payable on a range of savings accounts from 10 April as well.

“Heritage exists to deliver value to our members and the move to increase interest payable on some of our savings accounts is one way of doing just that.”

* Based on a $150,000 loan over 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.