Teachers Mutual Bank, one of Australia’s largest mutual banks, is increasing home-loan variable and fixed interest rates by 0.10% per annum, effective from Tuesday for new business.   

The changes are in response to the higher cost of funds and regulatory requirements on the mix of home loans.

Steve James, CEO of Teachers Mutual Bank, said this minor adjustment to the variable rates is a necessary measure in the current low-interest-rate environment. “As a mutual bank, our commitment to the long term stability and growth of the bank for our members drives every decision we make,” he said.

While the mutual bank has had to make a “small interest-rate increase,” this is balanced by a range of benefits. “Our home loan fees remain lower than those of the major banks; and we offer fee-free redraw, no monthly fees, no fees for additional repayments, and no fees for paying a loan out early on variable-rate products,” James said.

The mutual bank’s offset facility is available across the majority of its home loan products, which according to James is quite rare in the market.

The home-loan variable and fixed interest-rate change will be implemented across Teachers Mutual Bank’s three brands: Teachers Mutual Bank, UniBank, and Firefighters Mutual Bank.

The rate change will be effective for existing home loan borrowers starting on July 1. 
 

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