The Greater Building Society’s standard variable rate is now more than half of one percent lower than the Commonwealth Bank’s rate after it today passed on the Reserve Bank of Australia’s 0.25% increase in official interest rates.

CEO Don Magin said that despite the cost of funding being higher for non-banks like the Greater, it had decided to put people before profits and only pass on the official cash rate increase.

Mr Magin said that the Greater’s standard variable rate will increase by 25 basis points (0.25%) to 7.30%p.a. Its Great Rate Home Loan (basic home loan) will rise to 6.94%p.a. The new home loan rates are effective from (tomorrow) November 5 for new borrowers and from November 15, 2010 for existing borrowers.

“As a mutual we serve our members, not shareholders, which is why the Greater is prepared to sacrifice profits for the benefit of its members,” Mr Magin said.

“That is the advantage of banking with a mutual like the Greater – competitive rates, low fees and significantly better service than the banks,” he said.

“Competition to the major banks is already here, in the form of building societies and credit unions.

“With rising interest rates people should be shopping around to see if they can get a better deal.”
 
Mr Magin urged people comparing home loan products, particularly those with honeymoon or packaged rates, to check the comparison rate or true rate to avoid paying thousands of dollars more on their home loan.

He said comparison rates help borrowers identify the true cost of a loan because they take into account ongoing fees and other costs not usually included in the quoted rates.

“The Greater’s comparison rate for its Getaways and Great Rate home loans is the same as the quoted rate, demonstrating that there are no hidden fees and charges.

“When you look at comparison rates, the Greater’s rates are even more attractive as the gap between us and the major banks widens.” 

Lender	Standard Variable Rate % p.a.*	Comparison Rate % p.a.#
Greater	7.30	7.30
Commonwealth	7.81	7.94

  

Media information: Craig Eardley, Greater PR, on 0437 477 493 or visit www.greater.com.au

*Terms, fees and charges apply to all loans
# Based on an amount of $150,000 over a term of 25 years. Comparison rate is true for examples given and may not include all fees and charges. Different terms, fees and charges may result in a different comparison rate.