A non-major lender has made a "difficult" decision to increase interest rates for variable residential and investment loans by 9 basis points, for both new and existing loans.
Effective from 29 May 2018, the decision by MyState Bank was put down to "changing dynamics in the financial services industry".
The MyState group reviews interest rates in response to a range of factors. These include regulatory requirements, current market conditions, costs of funding related to wholesale and retail deposits, investment to upgrade MyState's competitive position in the mortgage lending and deposit markets.
MyState Bank’s head of broker sales, Paul Herbert, said that the decision to raise interest rates was difficult, but recognised the changing dynamics in the financial services industry, including the ongoing need to invest in services for customers.
He added, "We have carefully considered a number of factors relating to changing our variable interest rates and the decision to raise interest rates was difficult and not one that we have taken lightly. While our interest rates will rise, they are extremely low by historic standards and remain highly competitive in the market. At the same time, we are continuing to improve our services for our brokers and customers to ensure that we are easy to do business with.”
MyState Bank's fixed rate home loan rates are unchanged. Any variable residential and investment loan customers who are affected will be advised of any changes to repayments within the next two weeks.