Bank Australia has announced an increase of 0.08% for the variable interest rates on its investor and owner-occupied home loans.
Acting CEO John Yardley said the changes – which will come into effect on 1 February – were the result of a difficult but necessary decision.
“We always aim to be highly competitive and ensure that we treat our customers who own the bank fairly by balancing lending product revenue and the interest we pay our customers for their deposits.”
This goal was especially relevant to Bank Australia, Yardley added, since the money lent to customers came directly from deposits made by other customers.
“With the cost of securing deposits increasing as banks compete fiercely for deposits, this has placed pressure on the bank’s funding costs. As a result we need to slightly increase our lending rates.”
After the rate hike, the standard variable rate will now sit at 4.82%.
This means that borrowers with an owner-occupied loan who are paying the standard variable rate will see their repayments increase by $11 per month (for a principle and interest home loan over 30 years).
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