Bendigo Bank reduces variable home loan rates

Following its regular pricing committee meeting, Bendigo Bank today announced it would reduce its variable home loan rates by 0.25% p.a.

Managing Director Mike Hirst said the bank’s pricing decisions aimed to strike a balance between the interests of all stakeholders – its borrowers, depositors, Community Bank^® partners and shareholders.

“The movements we have seen banks make this week were largely driven by a popular misconception that there is an exact correlation between the official cash rate and home loan funding costs.

“Movements in the Reserve Bank overnight cash rate actually have little bearing on the cost of the funds we require to support the borrowing needs of our customers and partners.

“In fact while the Reserve Bank has been lowering the overnight cash rate, the cost of funding our lending has been increasing, largely because of the consequences of events in Europe.

“The home loan rate reductions we announce today mean we will continue to absorb those costs for now, but in our future decisions we will seek to more closely reflect our actual cost of funds and balance the effect between borrowers and depositors.”

The new rates will apply from Friday 30 December, 2011.