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CUA members to benefit from variable home loan rate reductions

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Australia’s largest credit union, CUA, will lower variable interest rates across all owner-occupied and investor home loans, following the Reserve Bank’s decision this week to reduce the official cash rate by 0.25% for a second consecutive month.

A reduction of 0.17% p.a. will be passed on to all variable CUA home loan products, excluding CUA Rate Breaker*, with rate changes to be effective from Wednesday 10 July 2019.

“CUA’s decision is driven by our members’ interests. CUA is distributing the rate changes as fairly and equitably as we can to our borrowers, so every CUA member with a variable rate home loan will benefit and continue to enjoy competitive rates,” CEO Rob Goudswaard said.

The change means 80 per cent of CUA members with a variable rate home loan will have received a rate reduction of at least 0.42% p.a. across June and July.

“It’s important to note that market forces, rather than the RBA’s official cash rate, are the primary driver of CUA’s funding costs. This means it is not possible for us to absorb the impact of passing on the full rate cut especially as rates on some deposit products are at or near zero,” Mr Goudswaard said.

“CUA’s lending margins are already among the tightest in the market and reductions in the official cash rate adversely impact our profitability. As a member-owned organisation we need to generate sustainable profits as these provide our only source of core capital. This capital allows us to continue delivering competitively priced products now and in the future, as well as the service improvements and digital banking offerings members want.”

Members who wish to discuss the changes are encouraged to contact their personal banker via iM CUA, visit their nearest CUA branch or call 133 282.

The new variable home loan rates will be effective from 10 July 2019 for all variable loan products, excluding CUA Rate Breaker.

Members with a CUA variable rate home loan will be notified via mail in the coming weeks of the rate change and new repayment amounts applicable to their loan.

* CUA Rate Breaker members will receive rate reductions in line with the relevant terms and conditions for that product.