Lender slashes variable rates as rates near historic low

by Julia Corderoy25 Nov 2014
A lender has cut its rates aggressively as interest rates now near lows not seen since the 1950s.

Heritage Bank has cut its discount variable home loan rate to 4.39% and its standard variable rate to 4.69%.

The lender’s discount variable rate was cut 30bps from 4.69% and is available for loans greater than $150,000 with maximum LVR of 80%. Its standard variable rate was also slashed 30bps from 4.99%. The reductions were effective from Monday 24 November.

The reductions are on top of Heritage’s current offer to waive application fees of up to $600 on Discount Variable and Standard Variable loans up until Christmas Day.

Hertiage Bank’s chief executive John Minz said the rate cuts are all about giving consumers an unbeatable deal on their home loans. 

“We’re more concerned about the best financial interests of our customers than about maximising profit. We believe we offer the best overall package of rates, fees and services to borrowers. In fact, we don’t think any competitor in Australia is currently offering a better variable rate than the 4.39% now available on our discount variable loan.”

The new rates will be in place for a limited period only.

On the back of the cut, a Mozo spokesperson said rates were now reaching historic lows.

"When you look at average loan data from the RBA, average home loan rates haven't hovered around this mark since the 1950s," the spokesperson said.

According to Mozo's database, there are now 62 providers offering variable rates below 5%.