Bendigo Bank reduces variable home loan rates

Bendigo Bank will decrease its residential mortgage variable interest rate by 0.10% p.a. to 5.38% p.a.

Bendigo and Adelaide Bank Managing Director Mike Hirst said the adjustment aims to find a fair balance for all of the Bank’s key stakeholders.

“The fact is, with interest rates at record low levels, banks are now unable to reduce all deposit product rates. The price changes we have made to loans and deposits, following the two official cash rate reductions this year, aim to deliver a neutral impact on our margin,” Mr. Hirst said.

“When setting interest rates our Bank needs to consider many factors and carefully take into account the needs of our stakeholders including borrowers and depositors, shareholders, staff, partners and the broader community.

“Interest rates are now at a 50 year low, with customers receiving at least a 1.5% reduction in the residential variable mortgage rate over the past four years.

“While the reduction in mortgage rates is great news for home owners paying down debt, there are a significant number of people who rely on income from their deposits and we recognise they will continue to be challenged by this decrease,” he said.

Customers on a residential variable interest rate with a $400,000 loan will see their repayments decrease by $25 a month (principal and interest home loan over 30 years).

The adjustment is effective 29 August 2016 for new and existing loans.