Heritage Bank to reduce home loan interest rates by 0.20%

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

Heritage’s standard variable interest rate will be reduced to 6.54%.

CEO Mr John Minz said the 0.20% reduction meant Heritage’s standard variable rate remained extremely competitive.

"As a customer-owned bank, we always strive to provide the most competitive interest rates we can. We’re proud that our rates are among the best in the marketplace," Mr Minz said.

"Unlike the big banks, we don’t have to make bigger profits to pay dividends to shareholders, so we can keep our rates lower.

"However, we have to balance that goal against the higher costs of funding and the need to meet long-term capital and liquidity requirements.

"Our decision to cut rates by 0.20% provides the best overall outcome for our borrowers and for the organisation’s future."

The only exception will be the Discount Variable home loan, which will have its rate reduced by 0.15% to 5.84%.

The reduction to interest rates will be effective from Tuesday, 19 June.

* 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.