Heritage Bank takes the axe to business loan rates with sizeable cuts

Tom Watson

31 Jan 2020

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The recent drop in business loan rates has continued with Heritage Bank reducing a number of secured loan offers by between 0.09% and 0.91% earlier this week. 

Among the highlights, Heritage reduced interest rates on its residentially secured one year fixed business loan to 4.10% (down 0.49%) and its variable residentially secured business loan to 4.15% (down 0.64%).

In fact, as of the time of writing, the new 4.15% interest rate offered by Heritage Bank on its Variable Loan is one of the lowest Variable Residentially Secured Business Loan currently in the Mozo database.

The move from Heritage Bank on Tuesday was just the latest in a series of cuts made to business loan rates over the past year, with competition in the space heating up following reductions from both big banks and challenger banks. 

As of January 1, 2020, the average Variable Residentially Secured Term Business Loan the banks being tracked in the Mozo database was 5.05% - 0.47% lower than the average rate at the same time in 2019. 

Of course, the period in between coincided with three Reserve Bank interest rates cuts in June, July and October which saw the official cash rate plummet from 1.50% to today’s 0.75%. 

And with speculation high that even more RBA cuts could come in 2020 - potentially as soon as the February meeting - it’s possible that business loan rates could fall even lower.  

RELATED: Why 2020 could be the best year to take out a business loan

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