Study shows Heritage Bank offers best rate over last 12 years

Heritage Bank has out-performed 22 of Australia’s most well-known financial institutions by offering the lowest standard variable mortgage rate in the 12 years since 2000, a new study has found.

The study by Professor Abbas Valadkhani from the University of New England compared the average standard variable mortgage rate offered by 23 Australian financial institutions in the period from 2000 to 2012.

Heritage came out on top of all 23 institutions as the most competitive lender over this 12-year period, offering an average rate of 7.01%.

Next best were the Newcastle Permanent Building Society, Hume Building Society, Greater Building Society and Adelaide Bank.

Those offering the highest average rate during this period were Citibank, the Arab Australia Bank, Westpac, Bendigo and AMP.

Of the big four banks, NAB was ranked 11th out of the 23 institutions; the Commonwealth 14th; ANZ 17th; and Westpac 21st.

CEO Mr John Minz said he was delighted but not surprised that the study had identified Heritage as offering the lowest overall rate.

"Heritage is all about providing our customers with the best value we can," he said.

"As a customer-owned bank, we put people ahead of profits, and the results of this study clearly demonstrate that we are delivering on our promise of maximising value for our customers.

"We are extremely proud that we have come out on top of this comparison, particularly as it spans a 12-year period. That is ample evidence of our long-term commitment to the financial well-being of customers."

Professor Valadkhani's paper titled "The pricing behaviour of Australian banks and building societies in the residential mortgage market" Is being published in the Journal of International Financial Markets, Institutions & Money.

* 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.