bcu reduces rates

After careful consideration, bcu has decided to reduce interest rates on its range of variable home, residential and investment loans by 0.31 per cent per annum effective from Monday, 21 May 2012. Interest rates on bcu’s All-in-One line of credit will also decrease by 0.31 per cent per annum with effect from Friday, 1 June 2012. The new variable home, residential and investment loan rates will be:

bcu will also decrease interest rates on its range of variable business, agri and commercial loans by 0.31 per cent per annum with effect from Monday, 21 May 2012.  Variable personal loan rates will be reduced by 0.25% with effect from Monday, 21 May 2012.

The decreases reflect the ongoing impact of intense competition that bcu is experiencing for deposits  and as a result bcu's expectation is that the reduction in its funding costs will be less than the 0.50% reduction in official cash rate announced by the RBA on 1 May 2012. bcu’s lending to borrowers is primarily funded by members’ savings and investments and strong competition for these deposits has resulted in bcu’s funding costs increasing relative to the official cash rate over time. 

To keep rates for borrowers as low as possible for as long as possible, bcu did not increase its variable loan rates earlier this year, independent of the RBA, despite a large number of its competitors doing so due to the increase in funding costs. In addition bcu had passed on in full both previous RBA cash rate reductions where many competitors only passed on lesser amounts.

bcu is committed to providing a range of highly competitive loan and deposit products and bcu's lending rates remain lower than many of its larger competitors, which demonstrates a commitment to fair go banking. bcu will continue to carefully manage and balance the interests of its depositors and borrowers to ensure it remains a financially strong and sustainable financial institution in the long term.