Suncorp today announced that, in response to increased wholesale funding costs, it will raise the interest rate on its variable home loans by 0.15 per cent a year.
Effective Tuesday 15 January 2008, the interest rate on Suncorp's Standard Variable home loan will increase to 8.72 per cent a year and Suncorp's Back to Basics home loan will increase to 8.14 per cent a year.
Suncorp Group Executive Retail Banking, David Foster said competitive pressured in the global market over the past six months had significantly increased wholesale funding costs and the bank had absorbed most of the additional costs over that time.
"As out costs have continued to rise we have reached the point where we need to pass on some - but not all - of these to our customers. We have tried to meet the needs of our customers and also our shareholders who expect us to run a profitable business."
Mr Foster said while the bank had waited several months before passing on some of the increased costs to its home loan customers, its investment deposit customers had been benefiting from increased rates since July last year.
"Due to increased wholesale interest rates, we have periodically increased the rates on a number of our investment products over the past six months," Mr Foster said.
"Our Cash Management account customers can earn interest up to 6.75 per cent, which is equal to the official cash rate, while fixed term deposit customers have been enjoying much higher rates, including two market leading rates of 7.15 per cent for a four month term and 7.60 per cent for 12 months."
Mr Foster said in light of the increase, Suncorp's lending specialist would assist any home loan customers concerned by this situation to revise their current arrangements to ensure they remained appropriate.
"Based on a $200,000 loan over 25 years, the increase of 0.15 per cent represents an additional $20 per month."
"With more than 65 per cent of our home loans customers ahead in their repayments, most will not feel the impact of this rise as their are already paying more that the minimum amount. In spite of this, we advise all our customers to try to repay more than the minimum amount wherever possible to reduce the interest paid and the term of their loan," he said.
Suncorp customers who need assistance or financial advice should contact their nearest branch or phone 13 11 55.