Heritage to increase interest rates
Heritage Building Society 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 and is effective from Tuesday, 11 May 2010.
Rates will also increase by 25 basis points on variable rate personal loans and credit cards.
Heritage CEO Mr John Minz said Heritage had reluctantly made this decision following the Reserve Bank’s official cash rate increase by 0.25% on Tuesday, 4 May.
“To support our strong financial position, we need to maintain a sustainable margin in an environment where it is still costing us more to obtain funds.
“Despite passing on this increase, 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 15 August, 2010.
At the same time, Heritage has also increased the interest rate it will pay on a range of savings and term deposit accounts.