Bank hikes rates by 80 points following ‘competitor movements’

A regional bank has today announced adjustments to its mortgage pricing to “address competitor movements and respond to regulatory caps on growth.

Bendigo Bank has announced the following changes, effective Friday, 14 July:

• Variable interest rates will increase by 0.30 per cent for existing owner-occupied interest-only customers and 0.40 per cent for existing investment interest-only customers

• New business interest-only variable rates will increase by 0.40 per cent to 0.80 per cent with fixed interest rates increasing by 0.10 per cent - 0.40 per cent

• New business investment P&I variable rates will decrease by 0.15 per cent with fixed P&I interest rates decreasing by up to 0.30 per cent

Managing director Mike Hirst said the changes reflect the requirement to meet the regulator’s expectations while responding to the ultra-competitive owner-occupied mortgage pricing market for new lending.

“When setting interest rates our bank needs to consider many factors and carefully take into account the needs of our stakeholders including customers, shareholders, staff, partners and the broader community,” Mr Hirst said.

“We’ve tried to carefully balance the interests of our mortgage customers, those who earn money through deposits and those who invest in our bank, all while ensuring our pricing remains market competitive and provides the strategic springboard for accelerated growth.

“There is an intrinsic link between the profits our bank generates and the economic and social sustainability of the hundreds of communities in which we operate. We value the continued commitment of our customers as we strive to grow our business in an extremely competitive market.

“We believe the changes announced today put the bank in the best position to achieve this and ensuring we remain well below the 30 per cent interest-only settlements cap and 10 per cent growth limit for investor loans,” he said.

“We will also continue to waive the $625 application fee for all owner-occupied purchases and external refinances that take out a Bendigo Connect P&I product,” Mr Hirst said.

“Customers currently paying interest-only repayments are encouraged to convert to principal and interest repayments. Where the customer meets the lending criteria, the application and settlement fees will be waived.

“We will continue to assess the market conditions and make any subsequent changes as required to maintain our competitiveness, balance our regulatory restrictions while supporting our customers and their communities,” he said.

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