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.