Lender

Non-major bank lifts rates

By Reporter•Friday, 10 Feb 2017•6 minute read

A non-major lender has announced that the variable interest rate for existing owner-occupied home loans and business loans will rise by 10 basis points, effective immediately.

From today, Auswide Bank's reference rates for existing owner-occupied home loans will increase by 10 basis points, bringing the predominant standard variable rate to 5.45 per cent per annum (comparison rate 5.58 per cent).

This means that customers with an owner-occupied loan paying the standard variable rate on a $250,000 loan will see their repayments increase by $15.59 a month (principal and interest home loan over 30 years).

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Customers with fixed-rate home loans, RBA Rate Tracker home loans, personal lines of credit and investment home loans are not impacted by the increase. The bank’s current discount variable rate offer for new package loans over $150,000 with an LVR under 90 per cent is also not impacted.

However, variable rate business loans will also increase by 10 basis points to 5.28 per cent (standard variable).

The managing director of the bank, Martin Barrett, said that the bank had held off "for as long as possible" on increasing loan rates for owner-occupiers and business customers since adjusting pricing on investment home loan rates in December.

However, he stated that the rise was now “necessary” to “protect the interests of all stakeholders”.

Mr Barrett commented: “Our operating margin has sat just under 2 per cent for many years and this decision protects that long-held position in a competitive funding environment where a large proportion of our loan funding is sourced from depositors.”

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Anonymous Friday, 10 February 2017

So you have NOTincreased the Owner Occupier Home Loan Interest Rates due to a rise in the cost of funds but to simply increase the amount of profit you make to “protect the interests of all stakeholders” except your customers, Mortgage Brokers and Mortgage Broker referred clients.

If you acted ethically and truthfully instead of acting like a parasite, like the Big 4 Banks, then you could have significantly increased your market share but instead you have opted for higher profits, and then dribbled out the usual rhetoric.

-1
- Auswide Bank Friday, 10 February 2017
  
  Hi and thank for your comments, as advised in our release, our actual operating margin, which is essentially the difference between what we pay to secure funding for our loans, and what we charge in interest rates, has sat under 2% for many years. This latest increase will not significantly change this. It's mainly a reflection of the cost of our funds which includes all the Mum and Dad and pensioner deposit holders who fund our loans through their savings and term deposits, for which we also need to remain competitive. By stakeholders, we mean balancing the expectations, returns and costs for depositors, shareholders and borrowers. It's not just the Big 4 banks who have been adjusting their interest rates in response to this and, as we've seen in recent months a whole range of lenders (both big and small, bank and non-bank, traditional and online) make adjustments. If you're a customer please feel free to contact us to discuss further. If you're a broker please contact us via your Broker Relationship Manager. We strive to be transparent and available.
  
  2
  - OzBoy Saturday, 11 February 2017
    
    Interesting and good on you for taking the time to come out and reply to a very emotional post. However I wonder how you feel about the RBA coming out on Thursday and reported by the AFR on Friday that the lenders statement about "cost of funds going up" is actually a furphy (my words not theirs). They state if anything the cost of funds has come down and they are now going to look at this in depth. Be interested to hear what you think as it would appear that the RBA's public stance is at odd's to what most if not all lenders are saying.
    
    0
    - Stephen Catterall Monday, 13 February 2017
      
      I too read this in the AFR and was prompted to write a post, you beat me to it.
      It is disgraceful that the banks can make such statements and get away with it, more call for the banking royal commission.
      This is why banks have such a bad name, when they are found out they come up with an in-house compensation scheme that they think can wipe the board clean.
      Dishonest, but typical.
      
      0
Dave Friday, 10 February 2017

Bait and switch lender style!

1
- Anonymous Friday, 10 February 2017
  
  The old one two, unfortunate to see the smaller lenders playing the Big 4's game.
  
  2
- Brisbane broker Saturday, 11 February 2017
  
  100% correct Dave and Anonymous. You always have to be careful of this phenomenon - rope 'em in with a low 'special' rate, let the broker deal with the processing delays, and once the volume quota is reached, shut off the special offer, allow a couple of months for all the refinances settle, then lower the boom, and borrowers find themselves back at the same rate as they were on previously, and the trap is complete. Anonymous, this is not just a strategy employed by the Big 4 - remember ING's offer last year? How have you responded to your clients when they got their letter re the rate rise? And in 2015 before the two most recent RBA rate cuts, CUA were offering 3.99% on a basic variable. It was a great offer and it sold like hot cakes, but during 2016, those clients got exactly 0.1% of the 0.5% RBA cuts. They are now at 3.89%, so not that flash any more.
  
  The best advice is to only go with a 'special offer' when it is a guaranteed 'life of loan' discount off the standard variable.
  
  0

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Non-major bank lifts rates

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