RHG charges highest home loan rate

Thursday 24 December 2009

Article by Mozo

The latest interest rate rise by RHG, the successor to RAMS Home Loans, means that it is now charging customers the highest standard variable interest rate on home loans.

This month RHG raised its standard variable rate 39 basis points to 7.88 per cent, meaning that its home loan rate is now higher than that of the 110 other lenders rated by Canstar Cannex, the Sydney Morning Herald reports.

Such a higher rate of interest reflects the higher cost of home loan funding for non-bank lenders since the financial crisis, the news provider added.

Last week a NSW Supreme Court ruling found that RHG was in default on loan repayments to a creditor.

RAMS was sold to Westpac in 2007, a lender which has also recently been noted for its high interest rate rises. However, earlier this month Westpac chairman Ted Evans said that such rises were necessary to meet the higher costs of funding, adding that a range of interest rates across banks was allowing customers to compare home loans and work out the best deal for them.

"Competition in the markets will ensure that power is not abused, and as has been demonstrated again in recent weeks, such competition is alive and well in Australia," he told the Australian Associated Press.

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