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 Wednesday 10 March, 2010.

Heritage CEO Mr John Minz said that this is a decision that Heritage has reluctantly made following the Reserve Bank’s official cash rate increase by 0.25% on Tuesday 2 March 2010.

“Heritage’s 25 basis point increase is necessary to offset continuing increases in funding costs that are especially pertinent for smaller institutions that are working hard to remain competitive in a difficult operating environment,” he said.

He noted that the interest rates on various savings and investment products will also rise following the RBA decision, in some instances by up to 2.70 per cent.

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

“We hope that this delay will give our borrowers enough time to make household budget adjustments,” he said.

“Despite this increase, Heritage’s interest rates continue to remain lower than the average of the major banks and the majority of other lenders.

“Heritage continues to absorb as much as possible of the higher funding costs that are a part of the current banking landscape.”

Heritage also recently announced changes to a number of its high-interest savings accounts that are designed to give members more incentive to save.

These changes include reducing the opening balance required to open its On-lines@ver, Cash Management and Money Manager account to $1, effectively making it easier for members to access competitive interest rates for every dollar they deposit.

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.

* Home loan comparison rate based on a $150,000 loan over 25 years.  Fixed loan comparison rate applies only for loans with an LVR of 80% or less and a loan amount of $150,000 to $249,999.  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.

Interest rates are on a per annum basis. Rates are correct as stated and subject to change without notice. Rates shown are for new loans and do not apply to switches or internal refinances.

Home Advantage Variable rates include discounts shown from the Standard Variable rate. Home Advantage Living Equity rates include discounts from the Living Equity rate. Discounts are based on total lending in the package. Discount Variable LVR rates are for new lending and include discounts from the Discount Variable Loan Rate.  Discounts are not available in conjunction with any other interest rate discount or special offer. All fixed rates are fixed for the period stated and revert to the variable rate applying at expiration of the fixed term. To approved applicants only. Conditions, criteria and fees apply.

Loan to Value Ratio (LVR) is the loan amount divided by the value of your security property (determined by Heritage Bank at assessment), multiplied by 100. Owner Occupied loans have a maximum LVR of 95%, Investment loans have a maximum LVR of 80% and Living Equity has a maximum LVR of 80%. Heritage is not accepting any new investment applications until further notice.

This advice has been prepared without taking into account your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness having regard to your objectives, financial situation or needs.

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