RHG, RAMS Home Loans’ successor, is now charging the highest standard variable home loan interest rate after another rate hike.
RHG raised its standard variable rate by 39 basis points to peg their interest rate at 7.88 per cent. A report by the Sydney Morning Herald states that this home loan rate is higher than the other 110 Canstar Cannex-rated lending companies. This development comes a week after a NSW Supreme Court ruling revealed that RHG was in default with a creditor’s loan repayments.
The Morning Herald also reports that an interest rate that high shows the higher cost of home loan funding for non-bank lenders since the financial crisis.
In 2007, RAMS was sold to Westpac which is also known for high interest rate hikes. However, Westpac chairman Ted Evans stated earlier this month that these hikes are important to match higher funding costs. Also, Evans stated that having various interest rates from different banks gives customers the chance to compare the rates and find what is suitable for them.
He also added in an interview by the Australian Associated Press that market competition signifies that the scope of the company’s power is not abused and that the said competition is very much alive.
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