Australia’s largest customer-owned financial services provider has announced an interest rate cut of 14 basis points to one of its variable rate home loans for owner-occupiers.
CUA’s Fresh Start Basic rate of 3.99 per cent will take effect on 24 November.
The credit union’s three-year fixed rate for owner-occupiers will also fall by 0.16 per cent to 4.09 per cent.
“The rate cuts to some of our basic home loans are good news for owner-occupier borrowers. As a customer-owned business, we need to balance good value and competitive interest rates for customers today, with the need to be sustainable over the long-term,” CUA chief executive Rob Goudswaard said.
“It’s important for CUA to remain profitable so we can generate earnings that can be invested back into the business. That way, we can keep lending to more customers and provide even better products and services to customers.”
CUA confirmed that some other variable home loan rates would rise as of 24 November.
CUA’s other variable home loan interest rates (excluding the Rate Breaker package rate) will rise by 0.13 per cent for owner-occupiers, and 0.19 per cent for investors.
The new standard variable rate for owner-occupiers of 5.06 per cent will be 55 basis points lower than the average of the majors’ new standard variable rates, once all new rates have taken effect later this month.
Mr Goudswaard said CUA’s investor rate needed to move in line with the market to ensure CUA could continue to manage its investor lending growth.
He also noted that as a mutual, CUA’s costs reflect that it holds much higher levels of capital than the majors are being required to hold.
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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