Government support mitigates Bendigo Bank rate rise
Bendigo Bank has today announced an increase of 0.35% p.a. in its variable home loan rate. The new rate of 7.8% p.a. will apply from Wednesday, 17 November, 2010.
Managing Director, Mike Hirst, said the increase followed last week’s 0.25% increase in the official cash rate, which is an important factor in determining how much banks pay for money.
“There is also the higher cost of attracting retail deposits and wholesale funds which has continued to grow ahead of official interest rates.
“The fact is our funding costs have risen substantially more than our lending rates through the global financial crisis.
“Even with this change the bank will continue to absorb some of the excess cost of funding,” Mr Hirst said.
Mr Hirst noted Bendigo Bank had increased its variable home loan rate by less than ANZ, CBA and NAB and our rate remains below Westpac.
“We have been able to do this for two reasons – firstly because of the wonderful support we receive from our depositors, and secondly because of the Federal Government’s efforts to stimulate competition among banks.
“The Government’s support in buying high quality mortgage securities from smaller lenders has provided Bendigo Bank with affordable wholesale funding and this has helped us keep the impact of rising costs to a minimum for our borrowers.
“It has meant we can continue to support our home and business customers with competitively priced loans and this is critical as our communities recover from the global financial crisis,” Mr Hirst sad.
He added Bendigo Bank’s $30 early repayment fee on regulated loans would remain in place.
“We always set our fees based upon our set of fee principles which promote fairness and equity for all stakeholders.
“Bendigo Bank considers the interests of its borrowers, depositors, communities and shareholders to reach decisions that are well-balanced and competitive.
“We are also conscious of being able to offer our depositors competitive returns and we will also be increasing a wide range of deposit rates.”