NEWCASTLE Permanent will increase interest rates for variable loans and selected savings accounts in the wake of the Reserve Bank of Australia's decision to increase the cash rate by 0.50%, from 1.85% to 2.35%.
The Perm announced its decision late on Tuesday, a week after the central bank raised rates for the fifth consecutive month.
The Perm said its variable home loan rates and business loan rates will increase by "up to" 0.50% p.a., effective from Friday, September 16.
The Perm, whose announcement came days after The Greater reviewed its own rates, has also increased rates on a number of deposit products, including a rate of 3.50% p.a. on new 12-month term deposits.
Newcastle Permanent chief executive officer Bernadette Inglis said the decision was made after reviewing the customer-owned organisation's interest rates and the broader market.
"For a fifth consecutive month, we will be increasing the interest rates on a number of savings offers," Ms Inglis said.
"The RBA has increased the cash rate by a total of 2.25% since May. Since then, for many of our savers, we have continued to raise deposit rates and have increased both our six-month and 12-month new term deposit offers by an amount higher than the RBA's increases. Our 12-month term deposit offer has increased by a total of 3.10% to a highly competitive 3.50% p.a.
Ms Inglis said that passing these increases on has been particularly important for many of our longest and most loyal customers, "who may rely on their interest income."
"An increase in home loan rates is always something we carefully consider, however it continues to be necessary for us to remain competitive in the long term, as we balance the needs of our loan and deposit customers," she said.
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