According to Australian Broker News, Suncorp, a non-major bank has announced that it will hike its interest rates on all variable loans for home and small business lending as of 28 March.
With small businesses experiencing some drawbacks in revenue over the past year, how does Suncorp explain this boost in interest rates?
The Break Down of Interest Rate Hikes
- 05% p.s. for Variable Owner Occupier Principal & Interest rates
- 08% p.a. for Variable Investor Principal & Interest rates
- 12% p.a. for Variable Interest Only rates
- 15% p.a. for Variable Small Business rates
- 25% p.a. for Access Equity (Line of Credit) rates
David Carter, Suncorp’s CEO, explained that the decision to increase interest rates was related to the rising costs of funding and the costs associated with regulatory changes. They have also factored in the outlook for US rates.
Suncorp’s CEO said in a statement, “As a result, we have seen the key base cost of funding, being the three-month Bank Bill Swap Rate (BBSW), rise approximately 0.2%. This increase results in higher interest costs to our wholesale funding as well as our retail funding portfolio, such as term deposits.
Suncorp says the “vast majority” of its account holders will keep paying rates below the headline because of the various benefits and features of the product offerings.
Carter stated, “It remains our priority to offer a range of competitive products and services to all of our customers. The higher interest costs will benefit our deposit customers, with Suncorp offering attractive rates across term deposit and at call portfolios, including our new Growth Saver product that rewards regular savers with a 2.6% bonus interest rate.”
Mortgage brokers can use this information to bring in more business for residential and commercial clients seeking refuge from bank lending. Alternative lending options are garnering more attention and have more benefits for many clients.
First Choice Mortgage Brokers are a Sydney Mortgage Broker operating under the Australian Credit Licence Number: 382370