MyState Bank will slash fixed home loan and business interest rates and introduce radical measures to help customers hit by the coronavirus downturn.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
However, the Tasmanian-based bank will hold back the latest cash rate cut from variable rate home borrowers.
Parent company MyState Limited said the bank would introduce comprehensive support measures to help home loan and business customers dealing with the impact of coronavirus.
"This is an unprecedented situation and we recognise the great uncertainty that our customers are experiencing," managing director and chief executive officer Melos Sulicich said:
"We want customers to know that we're there for them.
"In response to initiatives announced by the federal government and the Reserve Bank, we have made changes that reduce fixed home loan rates, lighten the load for business and provide financial support for those who may be experiencing hardship."
The Reserve Bank last week announced an emergency 0.25 percentage point cut to the cash rate to an all-time low of 0.25 per cent in an attempt to limit the economic damage caused by the virus.
That followed a cut of the same size in early March, which MyState Bank, Tasmanian-based competitor Bank of us and the big four banks passed on in full to mortgage borrowers with variable rate loans.
MyState on Tuesday announced it would cut lending rates for fixed rate home loans by up to 0.80 per cent from March 31.
That would take its fixed rate for one, two and three-year terms with a loan to valuation ratio of less than 80 per cent down to 2.39 per cent.
It said those rates would also be available for eligible borrowers under the federal government's First Home Loan Deposit Scheme.
While it did not cut again for variable rate home loan borrowers, it said they would continue to receive its lowest ever rates.
The previously announced March cut would take effect for those borrowers on March 31.
MyState said business customers would get further reductions as well as the previously announced 0.25 percentage point rate cut.
New measures to support customers in financial hardship because of the virus included:
- home loan, personal loan or commercial loan customers could defer their payments for up to six months, with a check-in at three months;
- early access to Christmas accounts without penalty;
- raising the maximum threshold on high interest bonus saver accounts from $150,000 to $250,000;
- allowing customers to redraw any amount on home and personal loans; and
- allowing early access to term deposit accounts for business customers.
"MyState is a pillar of the local community and we're committed to helping our customers weather the storm. This is the most challenging event of our generation and we urge customers experiencing hardship to contact us for support," Mr Sulicich said.
Bank of us was yet to announce its response to the latest cash rate cut at the time of writing.
Bendigo Bank announced it would cut business loan variable reference rates by 1 percentage point for residentially secured business loans and 0.75 percentage points for non-residential and unsecured business loans.
"This announcement provides small business customers with further support to help them navigate the challenges ahead," the bank said.
It would also cut small business fixed rates by up to 0.82 percentage points.
Residential fixed mortgage rates for one, two and three-year terms would drop by up to 0.70 percentage points.
Variable home loan rates would be unchanged.
