Heritage Bank to reduce home loan interest rates by 0.20%

Heritage Bank announced today it will cut variable home loan interest rates by 0.20%, following the Reserve Bank of Australia’s decision this week to reduce the official cash rate.

Heritage’s standard variable interest rate will be cut to 6.14%, effective from Friday, 14 December.

CEO Mr. John Minz said Heritage’s standard variable home loan remained extremely competitive, well below the rates offered by the big banks.

”Unlike the big banks, we don’t have to target bigger profits to pay dividends to shareholders, so we can keep our rates lower, As a customer-owned bank, our motivation is to always provide the best possible rates we can,” he said.

“We still have to take into account the high costs of funding and the need to meet long-term capital and liquidity requirements

“However I’m proud to say that our reduced rates are among the most competitive in the market place.”

Mr Minz said it was important to remember that Heritage also had to consider the interests of investors.

“Cutting home loan interest rates has a flow-on effect that also reduces the interest payments that investors receive,” he said

“We have many customers, such as self-funded retirees, who rely on the interest income they receive from their investments to fund their living costs.

“It’s important that we keep in mind the needs of all customers when we make these decisions.

“The 0.20% reduction to home loan interest rates achieves the best balance for all customers.”

* 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.