Icon

CUA drops Fresh Start Basic variable home loan rate to 3.99% p.a.

 
father playing with two sons on grass with dog in background

Australia's largest customer-owned financial services provider, CUA, today announced an interest rate cut of 0.14% to its Fresh Start Basic Variable home loan for owner occupiers, with the new rate of 3.99% p.a. to take effect on 24 November.

Australia's largest customer-owned financial services provider, CUA, today announced an interest rate cut of 0.14% to its Fresh Start Basic Variable home loan for owner occupiers, with the new rate of 3.99% p.a. to take effect on 24 November.

CUA's new Fresh Start Basic rate is one of the most competitive rates available in the market. CUA's 3-year fixed rate for owner occupiers will also fall by 0.16% to 4.09% p.a., effective 6 November 2015.

"The rate cuts to some of our basic home loans are good news for owner occupier borrowers. As a customer-owned business, we need to balance good value and competitive interest rates for customers today, with the need to be sustainable over the long-term," CUA Chief Executive Officer Rob Goudswaard said.

"It's important for CUA to remain profitable so we can generate earnings that can be invested back into the business. That way, we can keep lending to more customers and provide even better products and services to customers."

CUA confirmed that some other variable home loan rates would rise as of 24 November. CUA's other variable home loan interest rates (excluding the Rate Breaker package rate) will rise by 0.13% for owner occupiers, and 0.19% for investors.

CUA's rates remain competitive and the new standard variable rate for owner-occupiers of 5.06% p.a. will be 0.55% lower2 than the average of the majors' new standard variable rates, once all new rates have taken effect later this month.

Mr Goudswaard said CUA's investor rate needed to move in line with the market, to ensure CUA could continue to manage its investor lending growth.

He also noted that as a mutual, CUA's costs reflect that it holds much higher levels of capital than the majors are being required to hold. CUA's Return on Equity (ROE) in FY15 was 6.2 per cent, compared to an average of around 15 per cent for the majors.

Rate changes: Owner Occupier

Home Loan Product

Current Rate (p.a.)

Change (p.a.)

New Rate (p.a)

New Comparison
Rate (p.a.) 1

Effective date

Standard Variable Rate

4.93%

0.13%

5.06%

5.12%

24/11/2015

Discount Variable > $250,000

4.93%

0.13%

5.06%

4.97%

24/11/2015

Basic Variable

4.85%

0.13%

4.98%

5.04%

24/11/2015

Basic Variable > $250,000

4.75%

0.13%

4.88%

4.94%

24/11/2015

1 Year Introductory Variable

4.55%

0.13%

4.68%

5.08%

24/11/2015

Fresh Start Variable

4.18%

0.13%

4.31%

4.33%

24/11/2015

Fresh Start Basic

4.13%

-0.14%

3.99%

4.05%

24/11/2015

Fresh Start Access

4.33%

0.13%

4.46%

4.48%

24/11/2015

Equity Line of Credit

5.43%

0.13%

5.56%

N/A

24/11/2015

3 Year Fixed

4.25%

-0.16%

4.09%

4.76%

6/11/2015

Rate changes: Investor

Home Loan Products

Current Rate (p.a.)

Change (p.a.)

New Rate (p.a.)

New Comparison
Rate (p.a.) 1

Effective date

Standard Variable Rate

5.23%

0.19%

5.42%

5.48%

24/11/2015

Discount Variable > $250,000

5.23%

0.19%

5.42%

5.33%

24/11/2015

Basic Variable

5.15%

0.19%

5.34%

5.40%

24/11/2015

Basic Variable > $250,000

5.05%

0.19%

5.24%

5.30%

24/11/2015

1 Year Introductory Variable

4.85%

0.19%

5.04%

5.44%

24/11/2015

Fresh Start Variable

4.48%

0.19%

4.67%

4.69%

24/11/2015

Fresh Start Basic

4.43%

0.19%

4.62%

4.68%

24/11/2015

Fresh Start Access

4.63%

0.19%

4.82%

4.84%

24/11/2015

Terms and conditions, fees & charges and lending criteria apply. ¹ Comparison rate calculated on a loan of $150,000 over 25 years based on monthly repayments. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. 2 Correct as at 4 November 2015, based on the new standard variable rates announced by the majors, which are to be implemented during November.

Feb 26, 2019 | Found in: homeloan,
Back to News