Since the Reserve Bank of Australia (RBA) cut the official cash rate by 25 basis points to a record low of 0.75% last Tuesday, non-major lenders have struggled to find the right balance to meet the needs of both their deposit holding and lending customers in their responsive rate adjustments.
Heritage announced it will cut its variable home loan interest rates by 0.15% and its variable personal loans and credit card rates by 0.25%, effective 15 October.
The lowest rate now available on a variable home loan with Heritage will be 3.07%.
“A reduction in interest rates is good news for borrowers, but not so good for depositors, especially when rates are already at their lowest point in history,” said acting CEO Paul Williams.
“The reality is also that we don’t have the big profit margins of the majors, because we always look to provide great value to our customers, so we have less room to move.”
“We’ve passed on as much of the RBA rate cut as we can afford, while balancing the needs of our customers as a whole.”
Bendigo will also reduce all variable home loan interest rates by 0.15%, for both new and existing customers.
Managing director Marnie Baker said the decision took into account the needs of the bank’s borrowers, depositors, small businesses, partners, shareholders and the broader community.
“These rate changes carefully consider the diverse interests of all stakeholders, the performance of our business, our market competitiveness and our deep connection with, and responsibility to, communities right across our national network.”
The home loan interest rate changes will be effective from 15 October.
Bank of Queensland
BOQ’s variable interest rate for owner occupiers and investors making interest only repayments will be reduced by 0.25%. The variable interest rate for borrowers paying P&I will be reduced by 0.10%.
The changes go into effect on 25 October.
Virgin Money’s variable interest rate for borrowers making Interest only repayments will be reduced by 0.20%. The variable interest rate for those making P&I repayments will be reduced by 0.15%.
The changes take effect 25 October.
Western Australia’s largest bank, customer-owned P&N, is passing on between 0.16% and 0.25% to both new and existing borrowers, effective 15 October.
P&N’s new one-year introductory rate will be 2.99%.
GM of member experience, Anna Pearce said, “I'd like to call out that as interest rates approach 0%, it is correctly being reported that banks will find it increasingly difficult to pass the cuts along to customers.”
Effective 14 October, AMP Bank is reducing interest rates across all variable rate home loans by 0.15% and is introducing a new two-year fixed rate offer of 2.89% for owner occupied P&I loans.
MyState will cut variable home loan interest rates by 0.15%, effective 14 October for new loans and 29 October for existing loans.
ME will cut interest rates for all new and existing variable home loan customers by 0.15%, effective 24 October.