Heritage, one of the nation’s largest building societies, yesterday announced a rate increase of 0.15 per cent on all variable home loan products except its Select Variable loan – which will only rise by 0.2 per cent.
Heritage CEO John Minz said that like other financial institutions Heritage had experienced an increase in the cost of wholesale funds.
“Heritage will continue to absorb some of the funding cost increases, but we are unable to continue to absorb the full impact,” he said.
The rate increase affects both new and existing variable home loans, and will be effective from Friday Janurary 18.
To minimise the impact on members Minz announced that Heritage would delay the increase in loan repayments until 1 April “to allow our borrowers some extra time to come to terms with early calendar year costs and household budget adjustments”.
Minz also added: “Heritage’s variable interest rates for our home loan products remain below the average of the major banks following these changes.”
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